It is a nice day in all of the markets–although both common stocks and preferreds are a little stronger than I would like to see. I simply like prices to move by a dime a day–these big up moves set up some selling for the future, but I have said that for a week and prices keep going higher. In the end I guess higher is better than lower.
The energy sector is moving higher as Saudi Arabia announces further export cuts and this helps all of the energy related issues-even LNG carriers. With crude up over a buck it remains under $50/barrel. Any significant cut by OPEC will be met by more pumping from the shale producers as new pipeline capacity comes on line in the second half of 2019 in the Permian basin. Also with stock markets calming down and the talk of a slowing economy falling off we will see a little upward pressure on energy–but the $80/barrel level the Saudis want to see is a long, long way off.
Over on the READER INITIATED ALERTS page folks are talking some on the potential PCG (Pacific Gas and Electric) bankruptcy, oil prices and the rebalancing of the S&P Preferred Stock Index which will take place effective January 22nd. The rebalancing of the index drives sales and purchases of preferred stocks by ETFs and likely some CEFs as they seek to match the performance of the index. REMEMBER THAT WE WILL ERASE ALL COMMENTS FROM TIME TO TIME ON THIS PAGE TO KEEP IT FRESH SO CHECK IT OFTEN AS INFO WILL DISAPPEAR.
To see what preferred issues are being added to the index and which are being sold you can go here.
Part of the attraction of watching this rebalancing is that the big ETFs that track this index DUMP shares on the market in large quantity thereby sending shares tumbling. This creates bargains sometimes which can be snagged by interested individual investors.
Lastly NOTE that we added an errors and omissions page here. If you see missing items or typos please let us know on that page so we can readily see the issue and get it taken care of right away. These comments will also be erased after a week so items are kept fresh.