The equity markets continue to react to the administrations bluster on trade and it is a bit unnerving. We are moving closer to the period when preferred stocks and baby bonds will begin to get sold in spite of interest rates which are moving a bit lower.
We just reviewed all of the income issues and there is, on average, no movement. The problem we face is that if traders continue to move the equities up and down in a violent fashion mom and dad investor are going to panic and sell out of their preferreds and baby bonds. On one hand this could create some bargains, but on the other hand selling begets selling and this could get a lot scarier than we want to see. A 1000 or 1500 point down day would likely be enough to start this process as the headlines on the main stream media would spend way too much time covering it.
Investors should maybe keep some dry powder available in case bargains become available. We have lots of the Arbor Realty baby bonds (NYSE:ABRN) being called later in April and if the unsettling in the markets continue we will leave the funds in cash for a week (or 6) to see if markets can settle a bit.
We will see how today’s close plays out. We would like to see the DJIA close down only 200 points (or some such number), not a collapse from the current 400 point loss which would set up for settled trading Monday. A collapse into the close may portend a very nasty trade day Monday.