After a day off and time to let emotions settle down a bit stock prices have moved strongly higher (probably too strong). We suspect this is a 1 day gain and we will see much more calm trading after today.
The never ending selling in the income issues appears to subsided and many issues are now going through some ‘backing and filling’–although there are a few laggards that didn’t get hit enough early this week and last week and they have been smacked. For instance the newer Gladstone Investment 6.125% baby bonds (GLADD) opened the day up 35 cents to $24.95 which must have set off a bunch of small sellers as numerous small trades of 100-400 shares came through and took the price all the way down to $23.10–would think that ‘limit’ orders should have been used? Buyers have come into the issue and it is now at $24.
Some of the shippers have seen strong buying in their preferreds–Seaspan, Hoegh LNG and Tsakos issues are all up over a buck. Additionally MLP Nustar Energy preferreds are all bouncing over a dollar.
We checked the CHSCN 7.10% reset preferreds from CHS and the shares are trading at $24.35 (from a low last week of $22.95)–up 67 cents for a current yield of 7.30%–wish we would have bought on the low last week. This is on our buy list, but we are doing our best to hold off a few days. We have a number of starter positions in some decent perpetuals, as we mentioned last week, and want to add shares, but this ‘reflex’ rally today in many issues will likely back off a bit later this week or next.
For the time being we are barely watching the 10 year treasury–historically we kept an ‘eagle eye’ on rates, but income issues are not trading based on interest rates right now (rates down, prices up) and other than watching as to whether it is forecasting a recession it is not of immediate concern.