Markets look fairly quiet this morning with equities darned near dead flat. The 10 year treasury is up 1 basis point and trading at 4.49%.
Last week was a weak one for equities. The S&P500 traded in a range of 4316 to 4466 before closing at 4320 which was 130 points below the close the previous Friday–a loss of about 3%.
The 10 year treasury moved in a range of 4.31% to 4.49% before closing the week at 4.44% – 12 basis points higher than the close the previous Friday. Jobless claims (or maybe we should say lack of jobless claims) are signaling a stronger than expected economy and the Atlanta Fed GDPNow website is still showing 3rd quarter GDP growth at 4.9%.
For this week we have lots of economic data being released, but the most important will come on Friday when the PCE (personal consumption expenditures) is released. Forecasts are looking for flattish year over year–surprises to the upside will shove interest rates higher–over that 4.50% area.
The Fed balance sheet assets took a plunge last week of $74 billion–after a couple weeks of reductions of just a few billion this large drop was expected as the Fed remains at the $95 billion/month reduction target. The balance sheet assets are now at the $8.024 trillion level.
Last week was another soft week for $25/share preferreds and baby bonds. The average share lost 13 cents. Investment grade issues lost 12 cents, banks lost 8 cents, CEF preferreds lost 13 cents and mREIT preferreds were off 14 cents.
Last week, as most weeks, we had no new income issues priced.