After hitting near 2.90% overnight the 10 year treasury has settled in to a trading range of 2.84-2.87%. We are assuming that investors are awaiting the CPI release on Wednesday before trying to drive rates over 2.90% on the way to 3%. It must be remembered that once rates are stable it takes a few days before investors are willing to tip toe back in–if we get a Goldilocks CPI report we would expect rates to be stable for another week and maybe we will gain a 1/2% in average capital gain on issues we own. Of course we have only lost 3/4-1% on most the the issues so it is unlikely we can have significant bounces.
With interest rates remaining under control the average preferred/baby bond is up 1 cent–with most issues up or down 10 cents or less. There are a few larger movers. Colony Northstar (CLNS) has 3 issues moving 2-3% higher as they had been too severely punished for a decent REIT with high coupon preferreds. CLNS, like Ashford Hospitality (AHT) is simply an unloved issue.
Of course everyone knows that equity prices are way up with the DJIA up another 400 points–a bit of irrational exuburance for the day.
REITs are down almost a percent again. The retail related issues we are watching closely are mostly flat. KIMCO (KIM) is flat at this moment at $14.19 after being as low as $13.75–current yield is 7.90%. Realty Income (O), the cause of continuous fighting over on Seeking Alpha, is down 46 cents trading at $48.44 giving a current yield of 5.25%–a point at which we normally would be interested, but not this time. Tanger Outlets (SKT) is just barely positive at $22.88 for a current yield of 5.99%. Whitestone REIT (WSR) sold off early today (must be because we just bought shares last week) going as low as $11.75 before recovering to now be at $12.11. The sell off was caused by an investor presentation released by the company which can be found here. We skimmed the presentation and didn’t find anything worthy of a selloff in it–but there are enough investors willing to try to read between the lines which means there are sellers based on nothing at all many times.
Utilities are flattish and MLPs are up a percent or two based on higher energy prices.