Equities are calm this morning (at 5 am central) after a 1% up move yesterday–the S&P500 futures are up 6 points. Of course we know this can turn quickly.
The 10 year treasury yield is up 5 basis points to the 4.05% area–unlike the last time yields hit the 4% mark this time it doesn’t act like it wants to fall back under that mark. Yesterday the industrial capacity index for September was released and it was much stronger than forecast at a +.4% against an expectation of +.1%–the previous reading was -.1%. Once again economic data isn’t matching the narrative of a soft economy. The NAHB home builders index did show a softening with the reading at 38 which was below the forecast of 44 as interest rates are biting into that business.
Today we have the building permits and housing starts numbers released at 7:30 am (central) so we will see how this important sector is fairing–as compared to the softening home builders index.
Yesterday I did nothing at all investment wise. Today I will nibble a little of the Liberty Broadband 7% preferred (LBRDP) as it was knocked down yesterday, once again, to a current yield of 7.83%. This is adding to a long held position.
Lbrdp: a falling knife, or a beautiful opportunity?
Dd–you know my answer–a scary opportunity.
In this market environment all opportunities seem risky. Everyone has their own level of risk tolerance
But for me these type of sell-offs are the type of opportunities that in general have really paid off well in the long term, so yeah I have added some LBRDP recently. If I liked it when it was over $25, and fundamentally nothing has significantly changed, well . . .
https://www.tweet247.net/tweet/SuburbanDrone/1582428216878587904 treasury volatility highest since 2008 now.
Mark,
How do you use the Move index? My impression is not to buy stock when the VIX is over 30, and not to buy bonds when the Move index is over 115. I haven’t paid much attention to this rule lately but in hindsight it would have worked well for the last couple of months for fixed income – I have been buying and losing, at least in the short term! Any thoughts?
Harley Bassman is the creator of the MOVE Index
You can contact him here:
hbassman2@bloomberg.net