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Monday Morning Kickoff

Last week was another difficult week–in particular in the interest sensitive issues such as preferred stocks and bonds of all sorts.

The S&P500 fell by almost 3% last week – trading in a range of 4223 to 4394 closing right near the low of 4224 – 126 points below the close the previous Friday.

The 10 year treasury traded as high as 4.99% before backing off on Friday and closing the week at 4.92%. The range for the week was 4.66% to 4.98%. Economic news was generally stronger than anticipated with the exception of the leading economic indicators (LEI) which continue to point to softness ahead–we’ll see.

This week we won’t have Fed yakkers as they are in their self imposed quiet period ahead of the FOMC meeting which takes place on 10/31-11/1. There is plenty of economic news this week with the most important being the personal consumption expenditures (PCE) which is being released on Friday.

The Fed balance sheet fell by $19 billion last week as the run off got back to near normal – although on a 2 week running basis it is much below norm–looking for big runoffs in the next week or two.

The average $25/share preferred and baby bond fell by 26 cents last week, investment grade issues fell 29 cents, banks by 27 cents, mREITs by 27 cents and shippers fell just a dime. Prices are now at their lowest level since at least 1/1/2022 (they were previously lower, but my data now goes back just to 1/2022)–almost 2 years.

Last week we had Carlyle Credit Income Fund price a new term preferred issue with a coupon of 8.75%. The issue finally had a OTC temporary ticker assigned Friday as CARFP. I have not seen trading at this point in time–although it may be trading.

5 thoughts on “Monday Morning Kickoff”

  1. Tim, Curious where you got “prices are now at their lowest levels since 1/21/22 almost 2 years”
    Looking at PFF and others, it looks like these prices go back to levels much further before that, what am I missing.? Thanks

    1. Hi rk160 – you see where I post the chart with the various sector pricing each Monday. I have a spreadsheet with pricing going back to 1/2022—I did have back to 2019 but the chart was too crowded so I took the earlier data off.

      That is why I said –
      Prices are now at their lowest level since at least 1/1/2022–almost 2 years.

      ‘at least’ is the key words here.

      I added a little explanation to make it clearer as to what it is.

  2. Over the weekend they talked about car repossessions are up and car loans that are 60 days late on payments crept up from 3% to 6% with a comment by one writer how do you get to work when you have no car. Was mentioned car loans on used vehicles are 10% and higher rate with a 1000.00 a month payment average.
    My wife was up visiting in Nevada county and noticed 2 houses on the same street had real estate signs with reduced prices. One that was a fire damaged home purchased in past year and remodeled obviously a buyer who intended to do a fix up and flip.
    Also mentioned in the news was consumer spending is still strong, sales up at restaurants and other businesses, but down at home improvement stores and electronics stores but that the amount of debt on credit cards that isn’t paid off after a year is growing. But Capitol One is still running ads asking people to charge more.

    1. Charles M – during the ALCS baseball series, Capital One must have run over 100 commercials asking ” What’s in your wallet”….making me wonder
      “What’s in their commercial real estate portfolio” 🙂

    2. Charles

      So far, I think, car loan delinquencies are only up for sub prime car loans? It appears to still be a tale of two different cities? As for housing, I saw a piece over the weekend that claimed that difference between buying and renting weighs heavily now for renting because of mortgage rates.


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