Lots of Red as Interest Rates Spike

Just looking over the investment grade preferreds and baby bonds I see lots of red as the 10 year treasury has spiked around 9 basis points today.

The losses are not very large in size–1/2% up to 1%. No big deal–BUT we are reaching the point where investors might panic out of shares. We’ll just see–likely a setback of rates will occur tomorrow which should take the ‘edge’ off panicky types–for now.

On this spreadsheet you can sort by investment grade to see what is happening.

10 thoughts on “Lots of Red as Interest Rates Spike”

    1. And yet red numbers seem pretty scarce today in quoted Preferred Land… Something’s gotta give if mid and long Treas keep moving up – which reminds me – how can WRB-H 4.125% be at a premium right out of the gates now???

  1. markets opened with 10 yr. opening at 1.31 doesn’t mean much. but talking heads announced unemployment claims were above 800,000 but this is old news as this was for the prior week and me being cynical, I suspect well connected people already knew this. See how the week ends.

    1. If the economy grows later this yr in the 4-7% annual range what will that do for the 10 yr and the value of preferred stocks……I could easily see a 2% ten yr if all of that happens…..

      1. 4%-7% would be a one off at best. Increases in interest rates in the foreseeable future are going to be primarily due to inflation rather than growth.

    1. Gary: Just speculating here, but could it be that Fitch (not shown in this sheet) rates them IG? For example NCV-A is NR for both S&P and Moody’s, but when I click on the ticker to go to the detail page, I see that Fitch gives it AAA.

      On the other hand, Tim’s note says “If Either Ratings Agency is Investment Grade…” which implies his filter is only looking at two ratings agencies.

      ¯\_(ツ)_/¯

      1. Hi Bur–yes you are close in guessing.

        Hi Gary–I will have to check–checked. There were 2 errors marked investment grade when they were not–I corrected. I count split investment grade as IG so they could have 1 IG rating and 1 not. Then on the 2 AllianzGI they are AAA per fitch–don’t know why the note on the rating doesn’t carry over right from the alpha sheet.

    2. Hi Gary–I will have to check–checked. There were 2 errors marked investment grade when they were not–I corrected. I count split investment grade as IG so they could have 1 IG rating and 1 not. Then on the 2 AllianzGI they are AAA per fitch–don’t know why the note on the rating doesn’t carry over right from the alpha sheet.

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