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Let’s Replay Inflation Once More

Well yesterday we had the consumer price index (CPI) released and it came it slightly hotter than forecast–did that move interest rates higher? No they ended lower. Did it move equities in a wild manner? No equities were quite tame yesterday moving in about 1/2% range. Of course I suspected interest rates and equities were poised for some big moves—predicting these things is impossible, but we all have ‘guesses’–that is all they are really.

Today we have the producer price index (PPI) being released and the forecast is for the headline number to be higher than last month (year over year) with the core expected to be flat. At the same time we will have retail sales released for August and they are expected to be softer than last month.

Interest rates are at 4.26% (10 year treasury) this morning and equities are 1/3% higher–as always it is meaningless to where we trade after economic news. Personally I am watching the 10 year treasury for a move above the 4.36% area–if it fails then we may simply tread water in a 10 basis point range until the FOMC meeting next week (Tuesday and Wednesday). Right now the forecast is for a skip of a rate hike next week–with 97% believing the ‘skip’ an increase would be a huge surprise.

I see JPMorgan is offering a 5.65% CD (callable) today on FIDO–that is the highest I have seen on FIDO or eTrade–others have noted 5.70% on TD Ameritrade. Pretty tasty rates.

Well let’s get the day rolling–keeping in mind the autoworkers will likely strike starting tonight/tomorrow–will that matter?

17 thoughts on “Let’s Replay Inflation Once More”

    1. DCP will pay a $0.4969 to Series C Preferred Unit to holders of record at the close of business on October 2, 2023

  1. 6% brokerage 10 year cd Bank of Montreal quarterly pay callable in 6 months

    Rates are slowly going higher and higher

    1. Are Canadian banks FDIC insured ? Will Canadian banks or the brokers withhold taxes on the interest ? Saw some decent rates on Canadian bank CD’s, but some questions to be answered first.

      1. Yes Cds sold by brokers here in the US are FDIC insured. The screens will show you the FDIC charter number

        1. I believe the Canadian banks are not FDIC insured, but I think they have US subsidiaries that are offering the CDs and that are FDIC insured. Similar result, more pedantic answer…

          1. Do you think Bank of China CDs or State Bank of India CDS aren’t US fed insured? … they too have a FDIC insurance numbered. All brokered CDs are sold with the US FDIC insurance number. There are 6 banks in Canada, none are FDIC insured. But there US sold Cds are

            1. Isn’t that because the issuers are actually the legally separate US based entities? In other words, isn’t the Bank of China CD actually issued by the Bank of China NY for example? I remember looking into this years ago and discovering that but am only using “Bank of China NY” as a made up example….

              1. Yes. Also brokers only sell I sured cds to retail. If it’s coming thru the channels, they’re insured. Just look for the charter number

              2. Yup 2WR.
                To engage in banking (like issuing CDs), a company has to be registered in the US (subject to FDIC, tax, banking regs, etc.). it is my understanding that “private” banks are no longer allowed to do public business in the US as a result of regulations put in place after the savings and loan meltdown in the late 1980s. In your example, BoC NY would be a subsidiary of BoC parent. It would be subject to US tax, audit, and banking regulations (including FDIC).

                In theory BoC could open a branch of the parent company in NY and register it as a bank, but BoC would never want to do that because it would make the parent company subject to US tax, audit, and banking regulations (in addition to China’s). It is exceedingly rare for foreign companies to their parent as doing business in US (or in most other foreign countries).

                More than once I have had to help a foreign company “unscrew themselves” after they have “accidentally” set up a branch of the parent company in the US (and in a few other foreign countries).

  2. Hi, question about a new preferred that citi is issuing today, expected to price at 7.875% pretty high but it won’t be listed. They will probably use the proceeds to redeem C J and K.
    But really why aren’t they listing this? They could definitely get a lower yield.
    Anybody cares to explain?

    1. Priced at 7.625 5yr call w Float 3.21 over 5 yr tsy. 1000 structure. 1.5 bil cusip 172967PE5

      1. Jerrymac,

        Cannot find further info on this new Citi 7.625 5Yr Call with float Cusip 172967PE5. Can you please post a link or any more info you can share…

        1. I see early trades at the 100.25 to 100.35… Suggest if interested get an “offer wanted” from your broker FI desk using cusip…Happy Friday

    2. Well seeing AAM a and b’s were called, and replaced by APOS nothing is out of the question. Many big positions int he TBTF fixed to floats w high coupons. All close to par because of their calculability.

      It’s not unlike my getting 6% on FRC cds’ here today gone tomorrow. Returned so quickly it was like it never happened.

  3. News yesterday that several airlines reported costs were up the 3rd qtr. due mainly to higher fuel costs. They also noted bookings were down for Thanksgiving travel, the start of the holiday season.
    What has surprised me is I keep a list of about 6 oil LP’s and Trusts on my screen and I watch daily. Even with oil moving up over 10.00 in the market over the past month these have traded in a narrow range. All of them should have been moving higher. I don’t think the traders believe the economy has the strength if oil went above 90.00 a barrel but then that is just my guess. If I was to swing trade it looks like I could be making .25 to .35 a share every couple days but I don’t think it’s worth it. One downdraft and I could lose all the profits in one day. A better plan is to wait as these approach the next dividend date and then dividend chasers will run up the stocks anticipating a higher payout from the past qtr’s increase in oil prices.
    Just my sense of things, booking a long haul cross country in the past 6 months has went from about $7,200.00 to $5,900.00 for a shipment Although I don’t think fuel costs have kicked in yet ( if they do)

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