Last week we continued to see movement of stocks to the upside with the S&P500 moving.another 1.3% higher. With a closing level of 4605 the index is at record highs—again.
Interest rates remained tame with the 10 year treasury closing at 1.56%—down from a close the previous Friday level of 1.66%. The lower level last week being achieved just days before the start of the FOMC meeting on this coming Tuesday. Odds are that on Wednesday we will see an announcement of the timing and level of tapering of purchases of treasury’s and mortgage securities by the Federal Reserve. Consensus seems to be for a reduction of $15 billion monthly (from the current level of $120 billion monthly) will be announced–but most certainly the Fed could announce it at $10 billion monthly (or some such level to start with). We will have and wait and see what happens.
The Federal Reserve balance sheet fell by a modest $9 billion. Of course it is at near record levels and each increase pushes the balance sheet to record highs. With a tapering likely we shall see the rate of change slowing to the upside.
Last week the average $25/share preferred stock and baby bond moved up a bit—by 8 cents. The investment grade issues moved 8 cents higher as well. Banks moved 5 cents higher and mREIT preferred issues moved up by 9 cents. Essentially in 6 weeks prices have not moved at all—some up and some down.
Last week we had just 2 new income issues priced.
Bank OZK (OZK) priced a new issue of non cumulative preferred stock. The issue priced with a coupon of 4.625% and is now trading under ticker OZKKV and closed on Friday at $25.00.
COMSovereign Holding priced a new tiny issue (320,000 shares) of a cumulative preferred with a coupon of 9.25%.
This is a monthly payor.
The issue is trading on the NASDAQ now and last traded at $23.57.