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Let’s Cruise into the Weekend!

Well we had the big banks reporting earnings this morning and JPMorgan (JPM) and Wells Fargo (WFC) both beat forecast as was expected.  I am more curious how the smaller banks are doing–the regional banks etc.  I want to see how the commercial loans are holding up–some of the community and regional banks specialize in multi-family lending–how is that holding up?

Yesterday ended up being a very solid day in the markets–stable prices in equities with interest rates mostly flat.  My portfolios move only minor amounts on days like yesterday- little up or little down–that’s fine since I am not really expecting upward moves in the portfolio, just hope to dodge any major losses.

I am sure most of you that have bought CDs and treasuries (like I have) in the last 6-9 months are very pleased with your interest payments when you look at your brokerage statement.  Seeing a monthly 4 digit interest total is very sweet  after seeing zip the last many years.  Balance these receipts with some solid 6-8% preferreds and baby bonds makes for a great risk/reward balance.  I actually bought a few 5 year CDs in the 5% area – not many, but who knows what the future holds so get a little when you can.  IF we see inflation in the 2% area in a year or two 5% CDs will probably go away, but we shall see.

Well let’s get this day rolling–with futures and interest rates fairly flat we will likely see a quiet day without fireworks–fine with me.

7 thoughts on “Let’s Cruise into the Weekend!”

  1. I am seeing a gazillion secondary market CD’s for banks I have never heard of before, likely small banks. Before the SVB meltdown last month, the most common secondary market CD’s were from Goldman Sachs. And there would be a smattering of others. Post SVB, Goldman offerings are a small percentage of what is offered.

    Despite the FDIC insurance, it appears that many are worried about their bank folding. Whether the bank crisis is behind us or not, some CD investors seem to think their bank(s) will fold. . .

    1. Good observation, same as mine. I’ve seen issuers on systems that I’ve never seen touch a brokered deposit. There is clearly concerns about liquidity across the insured banks. And not just one sector/asset size.

      So while treasury yields were dropping, banks are competing with higher rates. Crazy times. Was able to get 6 ytm on first republic. You can see the street is not taking deposit risks lightly. Orders are clearing like bucket shops, not from inventory with most marginal names.

    2. yes! I took a CD from Merchants Bank of Indiana for 4.95% for only 3 months to test the water and park some short-term cash.

  2. This is going to be a drawn out reporting of the regional banks. I see both CUBI and NYCB as well as several others don’t report until the last week of April. WAFD reported today and I haven’t read the full report but the highlights inYahoo don’t sound like it was bad. Could of been worse.

  3. I’ll wish everyone a great weekend, and leave you with a feel-good US story:

    Here’s only a minor excerpt since this is a firewall-protected.
    Start with the familiar measure of economic success: gdp. In 1990 America accounted for a quarter of the world’s output, at market exchange rates. Thirty years on, that share is almost unchanged, even as China has gained economic clout. America’s dominance of the rich world is startling. Today it accounts for 58% of the g7’s gdp, compared with 40% in 1990. Adjusted for purchasing power, only those in über-rich petrostates and financial hubs enjoy a higher income per person. Average incomes have grown much faster than in western Europe or Japan. Also adjusted for purchasing power, they exceed $50,000 in Mississippi, America’s poorest state—higher than in France.

    The article goes on about the really good (and a few bad) aspects of the US system, and basically leaves me with: If we would stop arguing about our petty differences (and get off our phones) around the Thanksgiving dinner table, then we can’t be stopped. House united thing…

  4. Tim, the basket IG Regional banks I watch are down on average 1.43%. No surprise..waiting to see their earnings and forecast.

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