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.