Lousy economic data?? Pretty much an understatement as we now have more than 20 million unemployment claims in the last month. Housing starts tumbled fairly hard in March, before the Covid-19 related issues hit really hard–April will be pretty bad no doubt. The Philly Fed Index was smashed lower–to a negative 56.6.
The key of course is not what is happening today, but what will happen for the balance of the year–prices will move on future data more than current data–obviously (or it should be obvious) no one really has visibility, but it appears to me that markets are now starting to be realistic–no V shape recovery will occur.
I read today that United Airlines has cut the May schedule by 90%–for all practical purposes they are shut down–looks to me like the airlines will see some bankruptcies–regardless of the bail out money.
No doubt everyone has heard that the bail out money is running out for small businesses–more money will follow, but it doesn’t matter there will be lots of small businesses that will either never reopen–or more likely will reopen, but after a few months of struggling to garner customers will hang out the ‘out of business’ signs.
I am mostly on the sidelines today–maybe a nibble here or there–but mainly waiting at 65% invested. On some of the more speculative issues I would like to buy I want a little more visibility.
I see the lodging REIT preferreds are pretty red today. I want some of these issues–but I want more long term clarity.
mREIT preferreds are mixed, but leaning toward the red side of things.
No real bargains in the CEF and utility preferreds and baby bonds--these things have been rock solid since the initial market shock wore off–no doubt there are lots of safety seekers in this arena.
Not sure when I will see a ‘all clear’ time to get 10% of holdings in mREIT and lodging preferreds–remember I am ultra conservative and when the pandemic is over (or handled) I would like to have a portfolio yield of 7-8%–would be more than happy to lock that down.