S&P500 futures are off a bit this morning–not much but a little. Quiet day? Who knows of course, but with earnings season upon us anything can happen. The 10 Year treasury yield is lower at 4.17%–off 6 basis points.
Speaking of earnings I am anxious to watch BDC earnings (or lack thereof). In particular I want to watch for both realized and unrealized gains and losses. From what I have observed thus far the unrealized losses are fairly high–much higher than a year ago. Generally the well diversified BDC will do just fine for now, but there will likely be a few that fall below (or near) the minimum asset coverage levels of 150% (there are a few that still have a 200% minimum asset coverage requirement).
Yesterday residential mREIT Dynex (DX) reported as did commercial mREIT KKR Real Estate Finance (KREF) giving us an early look in these sectors.. Neither report was pretty—no one expected them to be great.
Yesterday we had soft purchasing managers numbers released. Today we have home price indexes released as well as consumer confidence. I would be surprised if either of these moved markets – important as part of the macro picture, but individually not important.
6 thoughts on “Looks Like a Soft Market Day”
Crazy manipulation again: BOJ lifting the dollar, probably Powell buying long Treasuries and Biden administration supporting equities. I doubt we will have dips before early November.
The 3m/10y is now inverted. It took longer to invert than I thought it would but that’s the final nail in the coffin for me. The recession is here. As the 2y/10y reverses the inversion the data will continue to get worse.
My largest BDC holding is ARCC and they announced this morn. Stock is up 4.6% after announcing 12% divvy increase (43c to 48c) and reiterating special 3c divvy. Owned it since early 2017 and their management is stellar IMO.
This said, I sold some Jan $20 covered calls against 2/3rds of my position at $0.50 to generate more income lowering my basis to under $16/share.
I too count ARCC as my largest BDC holding and one of my largest overall holdings. Have owned it since 2013 also. Think the dividends alone have returned my capital costs since then, but the increase in value is almost as much as I paid for it in 2013……. It has sure been a good one to own. Wish all my buys worked out as good as this one.
Tim. .Very hard to buy new offerings ,Now,, so many Bargains. A&B rated preferred 6-8 % returns+ . plus $ 2-5.00 below Par. Ty. Georges