Equity markets are partying today with the S&P500 up 1.12% and the DJIA up 1.51%—not sure if this is a dead cat bounce or if the markets are relieved that the FOMC meeting time is almost here and we can get the ‘decision’ out of the way or maybe it is that we now have deals with all 3 automakers apparently agreed upon–who knows? No one. I only care because common equities will help income issues from getting hammered so bad.
The 10 year treasury is trading at 4.89% up 4 basis points. Just a quick review of preferreds and baby bonds looks pretty much flattish overall–1/2 issues up and 1/2 down.
Of course the star of the day is the Spirit Realty Capital 6% preferred (SRC-A) which is trading up $1.91 to $21.65 on the Realty Income (O) buyout of Spirit Realty. The issue will remain outstanding for now as I understand details of the deal–but when rates fall a bit I suspect that O will call the issue. Yield to that call may be a super deal–assuming rates don’t keep climbing from here–and not one of us knows if they will climb or not.
I see Brad T is touting his prediction of this deal – of course he recommended SRC many, many times – but most of the time at prices above the deal price – just glancing over his buy articles most were $40 (plus or minus a buck or two). Owners of SRC the last year or two maybe are going to be break even (counting dividends) depending on your buy price. No windfall profits in this deal.
Just glancing at my accounts they are plus a little or minus a little – hardly any movement overall. CD rates are down – at least at Fido 5.65% is the best available.
Let’s see how the last 90 minutes of the day workout!!