With weak growth in Europe and most of the globe and economic numbers that are weakening in the U.S. interest rates continue to fall.
The 10 year has traded down to 2.36% today and is currently trading around 2.37%. It was only 10 days ago that we wrote that it looked like rates would be falling into the 2.50’s%—and the ‘smart people’ on the financial news said rates would not be falling much if any further and likely would head higher. Only goes to show that no one knows with any certainty what rates will do.
These falling interest rates have made all of us income investors look like genius’s. Preferreds and baby bonds keep creeping higher–a few pennies here and a few pennies there. BUT we all know that these interest rates likely means that any company that is at least mid-quality are preparing prospectuses to head into a new ‘refinancing’ period–we will need rates at these low levels for a month or two before we see this occur, but you can be certain it will occur.
We don’t see anything unusual in the income markets today. The usual suspects are moving around – the junky CBL preferreds are trading down (of course) on high volume. We see the Arlington Asset Investment 8.25% new preferred trading near a new low at $23.08–think someone screwed up on pricing this one-you can see it here. Also the new term preferred from Priority Income Fund is not getting much traction and is trading in the $24.70 area–it is here.