I don’t know how many folks I saw on the boob tube on Monday calling for ’emergency’ Fed Funds interest rate cuts–it was quite a bunch. ‘The world is ending’–talk about ‘talking their book’. So yesterday we got a good share of the losses from Monday back and today we are roaring higher again. The losses Monday were around 3% on the equity indexes–NOT the end of the world. If indexes fall 10% that is a different story–but 3% is a whole lot less than 10%. Anyway the world is still turning–maybe things change this afternoon–who knows for certain?
I bought more shares this morning of the CHSCM 6.75% perpetual preferred (was fixed to floating, but now is fixed at 6.75%) for $24.96. I have added to this position a few times, but have a comfort with the current management team to remain strongly profitable.
Probably won’t buy further today, but may well do so in the next 2 days. The interest rate scenario is still playing out as the 10 year is at 3.94% now which is a pretty good bounce from the low around 3.78% on Monday–let’s see what happens here.
Between political bias and personal portfolio bias, truly objective commentary is getting hard to find.
Ugly close. The gales o’ September came early…
Yes the afternoon was ugly for sure. The moves generally take a number of days to play out–of course as always who knows.
Dan, algorithms written by humans doing flash trading. Add in the newbie investors who saw the drop on Monday then the rise in the market on Tuesday. The FOMO trade kicked in with people rushing to lock in any gains from Monday loss and as the market dropped more it created more selling. I agree with Tim it’s going to take a couple days to smooth out then we have the weekend off for people to recoup. The one thing that could happen is a unexpected event somewhere in the world and the news could rock the market with nervous investors finally waking up to the fact the market doesn’t always go up.
Screaming for an emergency rate cut means someone with leverage is in trouble.
Hate to say so, but as of this post Dow now down over 200. Was down over 1000 on Friday, rebounded only a fraction of that, less than 300, on Monday, and now as noted down over 200. So maybe the “Knuckleheads”, not so knuckleheaded. after all.
For myself with equities (outside of preferreds for fixed income) prefer indexes and NOT a market timer.
At least one website is reporting that the Dow turned downward after an “Ugly 10 YR Auction”. Jamie Dimon said “he’s skeptical that inflation will return to the Federal Reserve’s 2% target” and “The central bank will probably cut rates soon, he added, but “I don’t think it matters as much as other people think.” I’m no expert but it seems that we, like the 10 yr auction, are staring at UGLY.
Fed wanted to cut their rate to 3%, ultimately. The usual levered up folks want it back at zero soon.
Knuckleheads are those called for emergency rate cuts–not an emergency at least as of yet.
Liquidity is the drug of this market and like all drug users you shouldn’t be surprised they want to make sure the supply of drugs is going to increase.
Blink and it may change again.
Of all the things I saw, Jeremy Siegel getting on CNBC and calling for an immediate 75 basis point cut, with another 75 bps cut in September, was the most disappointing. I think it’s time for him to retire. Credit spreads are fine, employment weakening but positive, unemployment at 4.3% and rising because of labor force, etc. I’m not saying things aren’t weakening… but 75bps of emergency cuts is irresponsible.
Bingo mrinprophet. Normally I respect him–but that was just plain silly.
Bought CHSCM July 31st at 24.95 and more on Monday at 24.65. Also the CHSCN on Monday at 24.95
nice trades
bought some CHS M too the other day at 24.77 in the Roth. great ballast name. Seems like Japan wanted to wash out the hedgies/carry trade peeps who borrowed in low cost Yen and bot others w the proceeds. Then they said oh we won’t upset the markets by cutting when volatile! lol. BOJ/Japan a mess. But it worked. Looks like it hit MX Peso the most. So that is where they were going w their Yen borrowings. More knuckleheads w FED back on the front burner w all their ‘speak’ rest of month. Or as they used to say ‘we now resume with your regular programming’. Bea
Bea/Charles,
Never can go wrong buying CHS preferred’s. Very investor friendly company from my experience.
Tim, It might have been silly, but all he was really doing was putting into words what the Bond market has been saying for awhile now. He’s just a mouthpiece. His reasoning for what he was saying, to me, was spot on, although I think he appeared reactionary and his call for huge cuts now overshot and overshadowed what he was trying to say. Basically I personally agree with him, and agree with alot of what he has said over the yrs.
Just my opinion.
pig pile—yes I have agreed with him many times, but his reaction seemed kind of ‘panic’ mode versus calm reasoning.
Yep, certainly that’s how he came across. From the substance of what he was saying, and how he was saying it. Would have preferred he called for the 50 basis point cut in Sept. and left it at that. But thats just the reasonable side to take, the real discussion I wish it would generate isn’t necessarily why cut so much now, more to answer the question why are we twice as restrictive in policy than what the Fed has called “normal”. What are they seeing that calls for this? why is the Bond market resistant to higher yields while we maintain clearly restrictive policy? I’d rather reserve restrictive policy for times that call for it, not what we see now.
good comment ..there are those that can do..the rest teach
I’m surprised he’s back at it. He was dead wrong in Sep 2022 when he had another famous rant on CNBC on a very similar day when the Dow was down 600 pts and everyone was in panic mode. He said “all inflation has basically stopped” and chastised the Fed for continuing to raise rates. The Fed fund rate was 3.25% at the time and the 10yr was 3.7%. https://www.youtube.com/watch?v=9Xnwh_9KV3o
if they were to drop it 0.75%, markets all over the world would crash…that is crazy.
He was “screaming” same earlier this year. Declaring CRE would cause major recession. Knowing a little about how these folks are picked for TV, he is likely “acting” as this is good for CNBC ratings.
Jamie Diamond today declared no recession. Honestly, after all his proclamations otherwise, CNBC simply lauds his wisdom. I remember the choice is viewing “Real Housewives” or CNBC. It is all entertainment.