Monday Morning Kickoff

Here we go on a another week which will be driven by news on Covid 19, vaccines and the never ending saga of the next ‘stimulus’ package.

The S&P500 traded in a range of 3594 to 3699 closing the week right at the high of 3699—a gain on the week of around 2%. For the coming week it is likely equity markets remain flat to 2% higher again–only a ‘spike’ in the 10 year treasury above 1% or maybe a ‘problem’ with initial vaccinations in England of the Pfizer Covid vaccine could put a major dent into equities.

The 10 year treasury closed last week at .97%. This was a 9 basis points move higher on the week. Income securities have paid little attention to higher rates thus far—rates don’t matter much until they do and no one knows where the point of ‘mattering’ is at–certainly something over 1%.

The Federal Reserve balance sheet rose by $6 billion last week–simply a stair stepping higher as has virtually been the case all year long. The upward curve on balance sheet assets will really steepen when a new stimulus package is launched.

$25/share preferred stock and baby bonds have been following the lead of common stocks most weeks and last week was no exception as the average share moved higher by 11 cents–almost 1/2%. This move in the face of rising interest rates.

Last week we had 2 new income issues priced.

1st off we had a new baby bond issue sold by United States Cellular (USM) with a coupon of 5.50%. The issue has not traded as of Friday–but I would expect it anytime now.

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Then we had Selective Insurance Group (SIGI) sell a 4.60% non-cumulative preferred which has begun trading under OTC temporary ticker SLIG and closed last week at $25.80. This issue has traded strongly since the minute the 1st exchange trade took place.

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13 thoughts on “Monday Morning Kickoff”

  1. Single B or better….
    W/o pulling all symbols here’s on that list. I’m not recommending any just listing….
    VNO
    OPINL
    ESGRP
    QVC
    UZD
    ATH
    F
    AHL
    BMI
    AEJC
    SCE

  2. Well the day kind of snuck up on me!

    So what 25 dollar preferreds are over 4.25 YTC? Am I missing something here??

    1. If you prefer, Not much of a day for me so you didnt miss a lot. The highlight of my day was selling a bunch of GJH at $10.75 today, and then buying them all back on an average cost of $10.51.

      1. Grid – I’m curious, historically speaking does GJH act differently after x-div date because it only pays twice a year??? In other words does it normally recover more slowly? It looks like I sold too early at 25.59 last Wed but had only gotten a small partial buy less than a month ago for 200 at 25.27 so decided just to clean house instead of pay up for more… now wondering how anxiously the mkts been paying up to buy the distribution.

        1. 2wr, you might have had a different stock in mind; GJH is a $10 par issue, and has been trading around the $10.30 – $10.60 range for some time.

          1. Inspy – Man I am becoming frighteningly sloppy these days… Dorothy’s scarecrow and I seem to be having more and more in common each day… YES, I was talking about GJH, but by rote, I wrote 25 instead of 10.27 and 10.59. I did manage to buy 200 at 10.27 in 11/10 and sold 200 on 12/2 @ 10.59.

            1. 2wr, Glad to see I’m not the only one with sloppy memory syndrome, LOL.
              Only reason I caught the discrepancy is because I own GJH and missed the spike that Grid was able to take advantage of.

              In my case, I blame it on increasing age and an overly sedentary lifestyle.

              COVID lockdown provided the perfect opportunity to forgo daily exercises and chores, and to simply spend much of the day at the computer or TV set.

            2. 2WR, Its hard to say. KTBA pays every 6 months. It went exD a couple weeks ago and is now already trading higher than it did right before it went exD.
              I know because I own a slug of KTBA.
              To be honest I wasnt looking to flip these. But then I saw a higher bid come out of the morning gate at $10.65, so I put out $10.75 and if someone wanted them have at it and they did. Then a couple hours later some dumping occurred as it went to low $10.40s and I was buying up all the ones I sold. I had to pay up into $10.50s to get the final few hundred I needed to fully restock. But whatever, I basically got a double interest payment doing a one day flip and rebuy.
              These types of issues are starting to trade “premium” as they offer above market current yield. I can see it slide back into 10.20 range after exD. This will have limited upside due to the past call anchoring effect, but for this particular issue, and its backside price support, I definitely wont trade these for the new sister 5.5% baby bond coming to market.

    2. There are over 250 of them starting with BIP-A (at $4.26%) which unlike SIGIP happens to be cumulative and investment grade rated.

      1. I only saw like 55 of them. And of course we all filter down from there, eliminating others based on our own internal perimeters. For instance I don’t do shipping bonds!

        Maybe my screens are fibbing to me. I’ll go back in and see if I have something running in background. Thanks Derek

        1. There a quite a few, but 80% of them are too risky for me

          UZD
          ESGRP
          INBKZ
          TGP-A
          OCFCP
          UCBIO
          TWO-E
          ATCO-G
          AEL-B
          CLNY-G
          CIO-A
          CMRE-B
          AL-A
          SAK
          AEL-A
          AUBAP
          OPINL
          OFSSZ
          F-C
          CUBB
          NEWTL
          SAF
          TRTN-A
          ARGO-A
          QVCD
          SCE-K
          UMH-C
          CAI-A
          DCOMP
          ECCX
          QVCC
          TSCBP
          OFSSG
          INBKL
          WFC-V
          AJXA
          GNL-B
          SACC
          TRTN-B
          TSCAP
          DHCNI
          CAI-B
          TRTN-C
          SCE-J
          MNR-C
          LEVLP
          BFS-D
          FRGAP
          TRTN-D
          OXSQZ
          JSM
          HMLP-A
          PRIF-C
          SCE-H
          MNSBP
          RILYO
          AHH-A
          LMRKO
          LMRKN
          BFS-E
          UMH-D
          CLNY-H
          PEB-C
          RILYN
          AGNCN
          DRH-A
          UBP-K
          CUBI-F
          RILYP
          SCE-L
          RILYL
          ECCB
          PEB-E
          UBP-H
          PRIF-D
          CHMI-A
          AFINP
          BPYPP
          NLY-I
          ARR-C
          GSLD
          CODI-C
          SITC-A
          CODI-B
          CMRE-E
          TCBIP
          CUBI-D
          NREF-A
          BPYPO
          AGNCO
          GSL-B
          GLOG-A
          MFA-B
          BPYUP
          SCCB
          ATCO-H
          PRIF-F
          CUBI-E
          DX-C
          PMT-A
          PMT-B
          AGNCP
          AGNCM
          TGP-B
          TWO-B
          TWO-A
          GLP-A
          BPYPN
          ATCO-I
          IVR-C
          NYMTO
          RCA
          NYMTP
          CSSEN
          NLY-F
          SPKEP
          NYMTM
          NYMTN
          CDR-B
          IVR-B
          CHMI-B
          NRZ-A
          EFC-A
          PRIF-E
          CODI-A
          NLY-G
          ETP-E
          NRZ-B
          CIM-C
          OCCIP
          PIHPP
          DLNG-A
          FTAI-A
          MHNC
          RILYM
          FTAI-B
          TWO-C
          CIM-B
          CIM-A
          CLNY-J
          MFA-C
          CLNY-I
          MBNKP
          ALIN-B
          CIM-D
          SHO-E
          BML-G
          PRIF-A
          NRZ-C
          PBI-B
          SHO-F
          DCP-C
          INN-E
          TNP-E
          XAN-C
          APO-A
          ALIN-E
          BML-H
          DXB
          CNFRL
          CSSEP
          ALIN-A
          DCP-B
          ETP-D
          NSS
          GECCN
          MITT-C
          GMLPP
          ETP-C
          NS-C
          BHR-D
          CDR-C
          GLOP-A
          SB-C
          DLNG-B
          MITT-A
          SB-D
          MITT-B
          HT-C
          GLOP-C
          PEB-D
          INN-D
          PEB-F
          NS-A
          DHCNL
          NS-B
          SOHON
          CORR-A
          GLOP-B
          AHT-I
          NGL-C
          DS-B
          HT-E
          AHT-H
          AFSIB
          AFSIP
          AHT-D
          AFSIC
          AFSIA
          AFSIN
          WPG-H
          SOHOO
          DS-C
          DS-D
          MHLA
          WPG-I
          UZC
          NGL-B
          PEI-D
          AHT-G
          AFSIN
          HT-D
          PEI-B
          MDLQ
          MDLX
          PEI-C
          AFHBL
          AHT-F
          SOHOB

          1. Derek – Just making sure I understand what you’re answering…. Your list is of $25 preferreds or baby bonds that provide a yield of 4.25% or more to call no matter what the date of the call is???

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