Last week the S&P500 moved in a range 4447 to 4512 about 1% before closing near the low of the week at 4450 which 7 points below the close the previous Friday.
The 10 year treasury moved in a range of 4.22% to 4.34% before closing the week at 4.32% The close is about 7 basis points above the previous Fridays close. This morning the treasury is trading around 4.35%—will it break higher this week.
In spite of substantial economic news (in particular the consumer price index and producer price index) last week markets are simply not moving, but we all know how quickly that can change.
This week we have the FOMC meeting starting on Tuesday and wrapping up on Wednesday with an interest rate decision announcement at 1 p.m. (central) followed up by Jay Powell’s presser shortly thereafter. Expectations are for no change in interest rates, but you can be certain that each word spoken at the press conference will be parsed forward and backward. We’ll see where traders decide to take the markets.
The Federal Reserve balance sheet moved just $2 billion lower last week–a slowing in the last 3-4 weeks so we are due for a sharp drop in the next week or two.
The average $25/share preferred and baby bond moved up 12 cents last week. Investment grade issues moved up 16 cents, banks by 11 cents with CEF preferreds up 2 cents and mREIT preferreds up 12 cents.
Last week we had no new issues priced, but recent new issues are trading generally right new liquidation preference ($25).