Monday Morning Kickoff

Kicking off another week with some trepidation as states around the U.S. go into various forms of ‘lockdowns’. In Minnesota bars and restaurants and fitness centers will again take the brunt of the economic damage as all of them have been ordered to shut down for 4 weeks–and who knows whether it will be 4 weeks, 8 weeks or more.

The various shut downs and economic damage will be battling with the vaccine news for headlines–I wouldn’t bet on a tumble in stock markets now – a surprise stimulus package could send markets steeply higher–along with interest rates.

Last week the S&P500 traded in a range of 3544 to 3629–closing the week at 3558 which is a loss on the week of near 1%.

The 10 year treasury drifted off .82% to .92% before closing the week right near the .83% level—it looks like the 1% level won’t be breached this month.

The Federal Reserve balance sheet took a giant sized jump moving higher by $68 billion. The balance sheet has again reached the largest balance ever–big surprise.

Last week the average $25/share preferred stock and baby bonds rose by 1.5%-a pretty large jump. The mREIT preferreds lead price higher with a jump of near 4%. Banks were up just 1/2% with investment grade being up around 3/4%. Obvious folks are moving into the lower quality issues because those are the few issues that are trading below $25.

Last week we had 4 new income issues price.

REIT Vornado Realty Trust (VNO) priced a 5.25% perpetual preferred issue. The issue is trading on the OTC grey market under ticker VORTP and closed on Friday at $25.10.

Insurance company CNO Financial Group (CNO) priced a issue of baby bonds with a coupon of 5.125%. I have not seen trading take place in this issue as of Friday–would guess it will trade this week.

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Brookfield Finance I (a division of Brookfield Asset Management) priced an investment grade issue of baby bonds with a coupon of 4.50%. No trading has taken place in the issue.

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Insurance company Assurant (AIZ) priced a new issue of baby bonds with a coupon of 5.25%. This issue is below investment grade. The issue has not traded as of yet as far as I can tell. Expect trading this week.

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23 thoughts on “Monday Morning Kickoff”

  1. Any one have APLE?
    do you think it will start paying div again?
    stopped in March.
    yes it is a REIT.

    Walter

  2. Monday Afternoon Development? just read Biden has selected Janet Yellen for treasury sec. Sure better than an alternative like Elizabeth Warren.

    1. As long as they cut a deal with the Federal Reserve to buy all the money they are printing, to cover all the taxes they are not collecting while having a poor economic policy ……….. the actual person of a Treasuary sec. is irrelevant.

      How do we invest in green ink?

  3. Its curious to me that seemingly 80% of all the talk about the economic impact of the Virus is focused on restaurants, bars, gyms, hair salons etc….when this entire segment of the economy which includes about 10 other business types accounts for less then 4% of GDP. And not just that it accounts for less then 4% of GDP but has one of the higher percentages of employees that I call the “Have Nothings” that contribute minimally if at all to the percentage of taxes paid to support our anything but competent government.
    So whose controlling the narrative and for what purpose? Why is the entire focus of mass media on such a small portion of the economy that is simultaneously responsible for a disproportionately large percentage of the diseases spread? And why is that the real news from China which has basically eradicated the disease, successfully protected its population and emerged from its lockdown with total success censored to non-existent ?

    1. Richard, I like the way you think my friend. Hysteria = high, contributions to furthering the nation’s goals = minimal at best. The purpose? Simple… Voters and votes in favor of more have nothings/do nothings. Power hungry? You bet. These ‘leaders’ are drunk off of their little power trips. As for China, well, not a word can be trusted when it’s all monitored/pushed out of Beijing. Wouldn’t be surprised in the least to find that they already had a vaccine in hand before they unleashed this plague to accomplish EXACTLY what it did to the world as a warning to those who wish to further challenge their world dominance mission. Instead of critical race theory classes rammed down our throats, how about we ram down some work ethic classes, money management classes, smartphone timeout classes, do unto others as you’d have them do unto you classes? Never gonna happen, unfortunately. Doesn’t fit the narrative and free ride crusades these younger generations are drunk on. Scaring our population into submission is far easier than explaining how to right this ship. You know, fake it till you make it type crap. But I guess we can always hope? This Thanksgiving will certainly be a different one than I’ve ever experienced. I’ll have to make sure to take time out and reflect on why certain types of folks are continuing to try and cancel it as well. Might be the last one we’re allowed to have…

    2. “ Why is the entire focus of mass media on such a small portion of the economy”

      I think the focus has been on the mind boggling level of unemployment which has gotten better but a massive 10M net jobs have still been lost. Also, leisure and hospitality is the fifth largest employment segment accounting for 11% of all jobs. But I agree, it’s the working class “have nothings” (particularly women, minorities and younger people) who have been hit the hardest and popular media has focused on their hardship.

      1. When I refer to “Have Nothings” I’m thinking about the workers of the Gig Economy, Part time people in the Service Sector, People who have massive student loan debt with no intention of ever paying it back, Anarchists with more tattoos than brains that seemingly make up half the population of Seattle and Portland OR among other unmentionables….. The people who have made lifestyle choices and no longer want to accept the consequences of their choices in life but rather want everything to be given to them for free.
        Who bails out America when it drops below investment grade? None of the $6 million talking heads on network news, promoting the agenda of these people think its a question worth asking. But rather sell the idea that success and wealth are bad. That sell phony income equality. And a program of giveaways that would turn an all already non-competitive America in to a Fourth World Country

          1. Exactly why Tim has requested no political leaning posts. It quickly derails financial discussions.

              1. Are you clocked in as hall monitor all day or just picking up an extra shift? Relax already.

            1. Richard’s comments here are actually responsive to the lead paragraph of the Monday kickoff thread, and while I disagree with his analysis I wouldn’t consider them to be “off topic”.

            2. I just closed comments on that thread so we can all ‘refocus’.

    3. We’re a service economy and certainly covid as constricted far more than 4% of our GDP. I drawl back to the story of a salesman who got the sale, all he had to do was give a 10% discount. Problem was, they had a 9% profit margin.

  4. Tim, FYI – the CUSIP/ISIN in your VORTP chart is still wrong. according to SEC filing, it should be 929042810 / US9290428104 .

  5. I’m not making any big investments until after December 14, just in case. SPX fib extensions are 3767 – 4096 – 4300 – 4630. That is where we are headed in ‘21 no matter who is president. ATB.

    1. I’m holding until the results of the senate are clear. That can change tax policy and can change what the S&P earings reports.

      4300 S&P in 12 months = Bubble: Take some profits

      IMHO

    2. I am in PSEP – Innovator ETF . At today price of 27.30 It has downside buffer of 8.5% and upside cap of $15% with Sept 1st 2021 . No dividend , but if You are expecting upside , probably the safest option

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