The stock indexes are pretty darned quiet this morning–all morning. The futures markets took a huge tumble of 2-3% at 7:30 am (central) when the producer price index (PPI) was released. PPI came in at .3% versus forecast of .2%—obviously the ‘algos’ didn’t like it, but honestly it is kind of a yawner.
Interest rates (the 10 year treasury) popped on the PPI release–up 6-8 basis points to 3.56% now. Given that it traded as low at 3.40% yesterday 3.56% seems just fine–not sure it should have been at 3.40% anyway.
Consumer sentiment came in better than expected, while inflation expectations held steady at .3%.
Preferreds and baby bonds are red today–maybe 75% of the issues red–BUT the red is most nickels and dimes–mostly nothing severe.
This has probably been the least active week for me in terms of buys and sells–I did nothing–not a single transaction. Next week I will almost certainly do some selling–sales around the edges, to free up some cash. Bargains remain in the high quality sector–6% to 6.50% area. I may dip into the Highland Income Fund 5.375% preferred which is rated A1 by Moody’s–current yield of 6.74% with a yield to 1st call of 18%. Management of Highland had been trying some ‘sketchy’ moves early this year (or was it last year) and I want to do more due diligence before pulling the trigger on this one because obviously the marketplace doesn’t like the issue as it is trading at $19.97.