The 10 year treasury yield has tumbled hard–down 14 basis point to the 4.10% area.
Consumer Confidence came in much softer than anticipated and Case Shiller is showing that house price gains are decelerating sharply.
Add to this data that we have some Fed folks that are apparently beginning to hint at an interest rate pause (of course watch what they do not what they say).
Preferred’s and baby bonds are stable. If folks are expecting a quick snap back in prices based on a 1 day move in interest rates you will likely be disappointed. Historically it will take a minimum of say a week or two before we get any lift whatsoever and then it takes time–time to repair confidence in investors. Who wants to buy a preferred and take an immediate capital loss? My accounts are green today–but barely.
Today I have a couple low ball nibble orders in–one for some KKR Real Estate Finance 6.50% perpetual preferred (KREF-A) at a current yield near 9% and then a little more of the Brighthouse Financial 6.75% perpetual (BHFAO) with a current yield of 7.43% (split investment grade). Don’t know if these will execute.
Hi Tim,
Would you consider to buy 2YY future as a hedge to your portfolio? My ETD portfolio has been hitted badly last month and I have checked 2YY performance during the same period generate more less same % gain..I havent bought 2YY though….
Anyone else surprised or have an idea why preferred shares almost zero rally today? Most bond/funds across the board are higher
my ABR preffereds were up considerably as were several others, so not seeing the zero rally. I call this a very good day.
Zero rally?
I was out most of the day but looking at my accounts now I see a ton of green on preferreds and others
Sjc, This also happened after the March 2020 plummet. Many preferreds lagged for months. Not as much interest in preferreds as commons. Less liquidity. And I’m sure some of the spreads keep buyers and sellers away. That’s my thoughts on it. I did have positive movement on several of my investments today. Nothing grand .25-.75 on most. $1 on a couple.
sjc–as I mentioned yesterday it will take a week or two before we see substantial rally because of rates.
“Preferred’s and baby bonds are stable. If folks are expecting a quick snap back in prices based on a 1 day move in interest rates you will likely be disappointed. Historically it will take a minimum of say a week or two before we get any lift whatsoever and then it takes time–time to repair confidence in investors. Who wants to buy a preferred and take an immediate capital loss? My accounts are green today–but barely.”
sjc – I wrote yesterday.
“Preferred’s and baby bonds are stable. If folks are expecting a quick snap back in prices based on a 1 day move in interest rates you will likely be disappointed. Historically it will take a minimum of say a week or two before we get any lift whatsoever and then it takes time–time to repair confidence in investors. Who wants to buy a preferred and take an immediate capital loss? My accounts are green today–but barely.”
Welcome to another round of Bad News Is Good News. Thank you for playing.
nibbled on a little EQH-A
7.03%
BBB-
QDI