Another day starting ‘green’ in the futures market–do we have a rally day or do equity prices dump like yesterday? Right now (7 am central) the S&P500 is up by just over 1/2%. The 10 year treasury yield, which closed yesterday at 4.13% is now at 4.10%–down 3 basis points.
Today we have jobless claims being announced–softness? We’ll see–probably not anything market moving. Philly Fed manufacturing index is on tap as well–forecasts are for softness. Home sales for September is slated for release at 9 am (central)–forecast is for 4.7 million versus last months 4.8 million. Leading economic indicators are going to be released and is forecast at -.3%–a large deviation could move markets.
Today is probably a quiet day for me–I keep nibbling and the more I nibble the more I lose. My accounts hit a low point 1 week ago and with a low cash position I see no reason to nibble more this week.
Nevermind let’s get Thursday going – let’s get the weekend going! Love the quote, Bea – Oh well, hold nose, catch knife, wipe blood, repeat
I deployed a good chunk of cash today. Bought preferred of double IG issues to yield in the 6.3 range. Just couldn’t wait for more and and happy to settle in for the long haul at that rate with qualified dividends.
You guys call them “stink” bids. Be careful about entering too many such bids. My experience is that, when they raid the whore house, they take all the girls. I think we’re approaching the time when many sellers (institutions & individuals) will decide they want out. Then, they hit the bids—any bids. Credit spreads widen dramatically.
I have selectively cancelled some low ball orders and left standing some even lower ball orders. I suspect some of them will get filled by the end of the year. Obviously I don’t know the future. This is just how I’m playing it.
No, I call them low ball orders, too. Not that I have any outstanding. I just keep nibbling on what I think will continue to pay me–iow, very IG stuff.
“Into each life a little rain must fall.” I don’t know who said that, but it seems pretty apropos about now.
We’ll see.
my stink bid hit for HPP-PC at 13.84..more FED speak hate..love it.. my new motto patience and get paid.. 8.58% yield, insider buying..mclovin it. Bea
Bea – I followed you in to HPP-C after a little DD. IG, insider buying, debt to (depreciated) assets of 56% and a yield at my $13.70 cost of 8.69%. Not just a little insider buying – there’s a bunch of Form 4’s in the past month. You may want to consider MS-E. Current yield is 7.12% and resets in one year at 3 month libor plus 4.32. Most likely will be called but this means it should be pegged to par with a pretty safe 7% yield.
I still get the feeling people are way too fearful/worried about buying right now. Yes prices may go down more but the point is safe, secure, and generous income. People mix in the “stock market” fears for the common shares and apply those feelings to the fixed income realm which confuses the goal. Then we have inflation which seems to be caused by multiple factors which is already slowing so now a person has to think 6-12 months ahead what might be the outcome. It seems the FED raising rates will have to slow down after the next round just to give the world time to digest the changes at the very least. The so called pivot is incoming. If you wait for any hint of the pivot that will most likely be too late. Who knows what the catalyst will be for that pivot but we are due for it next year. Recession is pretty much here for your average person.
Everyone is different. I get that. So giving advice or even an opinion is difficult without knowing the other person in exacting detail.
But woo doggie. If we took a poll here right now it would probably match up with the fear and greed index nicely. I am not that timing, buy/sell constant type of person. I want something I can hold and milk like a cow in the pasture.
I mean click on this link, click max time: https://fred.stlouisfed.org/series/BAMLC0A4CBBBEY
We are approaching yields people would have been happy with on BBB bonds for the last 20-25 years. Yes the 70s sucked. We all know that. I do not base my investment decisions on the great depression either. Compared to almost any time in the last 10 years this is a great time to start buying!
fc:
Definitely a great time to buy income securities. But don’t see a Fed “pivot” anytime soon. Perhaps they will just hold off on any more rate increases for most of 2023. Inflation is entrenched. It will fall, but getting back down to 2% anytime soon seems like a fantasy. I hope I’m wrong.
I just got hit with a 59% increase in health care premiums in 2023 for my PPO plan. Good grief. Looks like an HMO is in my future.
At $30.25, the big PFF preferred ETF is now down 20%+ on a total return basis YTD. Another good grief!
Just an added thought, as I do not know the future either. Rates are adjusting to inflation by moving up as FC noted. But there is a second component to yields and that is the credit spread. It still hasnt moved up really. And we know what happens to credit spreads in a recession; if that is a base case for a persons assumption, which it may or may not be.
https://fred.stlouisfed.org/series/BAMLC0A4CBBB
Grid, Spot on. The Ten year minus your favorite preferred yield is as shallow as a saucer. We had at times (much) better speads over the last few years ironically when pfd yields were as valuable as 1972 wallpaper.
You and I love to measure that metric on buys and I’m still a believer and there was a time I’d hold out for TNX + 3.5% though that has gone straight over the shoulder as not willing to sit out this volatility and apparent ETF indiscriminate selling (dumping). It’s possible at some point the spread is restored via the TNX retreating, though if instead the market wants to hand over 7% IG, they will be on our dance card.
Today’s yields, as fc outlined so succinctly, are what we’ve been waiting for – for years. We’ve been buying hand over fist, all high IG – and will not stop until the market has passed the nadir. 9 of 31 positions had adds today, all proportional and followed up with new bids. The ute bond we bought just a few days ago can already be averaged-down and we will oblige.
Headline this morning: “New claims for unemployment declined”. Short and to the point, but had to read it three times to make sure I wasn’t hallucinating. Couldn’t help but wonder what Jay’s reaction was to this headline. We know what it wasn’t.
FC it’s different all across the country when it comes to the economy. The 70’s I was a teenager and young adult living in the greater LA area. I had no problem getting a job, lived with family. Mid decade so many things happened. The vet nam war ended. Military and government spending dropped and the economy collapsed. But you have to know with several million people in southern Cal. things were different than say Northwest Pennsylvania where my family moved to or Northern Cal where I went to college those areas had 18 to 20% unemployment compared to 12% in LA.
I would say it’s not much different now with the economy in different places in the US.
Now I don’t know what the volume is today on the stock exchanges, but to me it felt like it is a slow day and so I think a lot of investors are sitting on the sidelines.
Fun headline to open III to!! wish I had some of your enthusiasm, Timmo!! I did add a little AHH.PRA this am at 21.47 and have a stink bid in to add a little more HPP.PC. On top of ofc REIT weakness I think w HPP.C being low IG it may be in some of these etfs and cefs or other places that are limited to IG issues and possibly they are still selling/disgorging. Who knows.
Anyway happy if I can grab these as I continue to build the pfd portfolio. Cash certainly wasn’t ‘trash’ to allow me to get some of these at what I feel are great prices. Like Tim I am running low on cash in Trad. IRA but some good room in Roth yet. Oh well, hold nose, catch knife, wipe blood, repeat. GLTA. Bea
Bea–I just can’t help myself–I am up most morning between 4 and 5 am and it is my most positive mental time of day–I haven’t yet been clubbed by the markets.
Tim, I’m an early riser also. Best time of the day from 4:30 to sunrise. Coffee and quiet times. Good thinking time. Lived in Iowa, Minnesota (Bemidji), Arkansas, Now North Central Florida. All beautiful mornings. Enjoy.
Market Watch banner headlines, unemployment claims are down as recovery from hurricane Ian picks up, Philly manufacturing down again for the 4th time in 5 months.
So a mixed bag