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Monday Morning Kickoff

The S&P500 traded in a range of 4430 to 4514 in a holiday shortened trading week. This was a loss of 1.2% from the previous Fridays close.

The 10 year treasury closed the week at 4.26% after trading in a range of 4.21% to 4.31% – actually a very tight range. While there were lots of Fed yakkers during the week there was only minor amounts of economic news. Once again the 1st time jobless claims number released on Thursday was much lower than forecast–this needs to rise not fall (not to wish any ill will on anyone).

This week we have important economic news with the consumer price index (CPI) and the producer price index (PPI) being released on Wednesday and Thursday. The CPI is forecast to rise–with the core CPI forecast to fall. Any deviation to the upside on this number will push the 10 year treasury up beyond 4.30% and possibly above the 4.36% mark.

The Fed balance sheet fell by $20 billion last week – an average move lower–$8.101 trillion balance now.

The average $25/share preferred and baby bond fell last week 13 cents. Investment grade took a hit and were down 26 cents. mREITs were off 6 cents and CEF preferreds were off 17 cents. The only sector escaping the beat down was the shipping sector which was flat.

Last week we had no new income issues priced.

8 thoughts on “Monday Morning Kickoff”

  1. Tim, guys
    Quick one. Are there any solvencies, financial ratios you take care of before buying either Babys or Preferred stocks?

    I`d appreciate your feedback

  2. Gary,
    But shouldn’t they just about out of anything with risk to it this close to liquidation? And cutting the divvy might impact the price, but not the NAV, right?

  3. Does anyone have a thought as to what’s going on with IHIT, a short-term closed-end fund that used to be on an III model short-term portfolio (I don’t see that portfolio any more, so I suppose it was eliminated at some point.)? The fund has taken two rather large daily markdowns in its NAV, one on 8/22 and another on 9/8. This seems rather troubling with a short-term fund scheduled to be liquidated in just a few months, so why the steady and considerable erosion recently in NAV?

    1. Maybe the ~ 45% in commercial mortgage trusts (8 of top 10 holdings)? Another problem – altho it hasn’t hurt the price much:
      Invesco High Income 2023 Target Term Fund cuts dividend by ~43% – on 9/2

    2. Gary,
      But shouldn’t they be just about out of anything with risk to it this close to liquidation? And cutting the divvy might impact the price, but not the NAV, right?

  4. Tim, just FYI, two new BDC baby bonds have started trading recently but have not yet been added to the New Issues list.: Whitehorse, WHFCL 7.875% 9/25, 28 currently $25.05; and Gladstone Capital, GLADZ (reused symbol, I think) 7.75% 9/25, 28 currently $24.99.

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