Monday Morning Kickoff

Well we had one heck of a party in both stock and bond markets last week based on a Fed Funds rate hike pause as well as some weaker data on employment and news of treasury issuance. It is somewhat doubtful that we can followup last week this week – but if we can trade flat I will be more than happy.

The S&P500 traded in a range of 4133 to 4374 closing near the high at 4358–a gain of 241 points from the previous Friday – a gain of 5.9%. Wow–seems like an overreaction, but of course the markets always overreact in both direction.

Interest rates (the 10 year treasury) plunged, but traded in a range of 4.48% to 4.92%. The close of 4.56% was almost 30 basis points below the close the previous Friday which was 4.85%. This morning the 10 year is up 3 basis points at 4.59%. There is minimal economic data being released this week so maybe we will trade in a modest range this week (famous last words).

The Fed balance sheet assets fell by $40 billion to now stand at $7.867 trillion. Seems like the pace of runoff remains fairly consistent with the $95 billion monthly target.

As we have all discussed the average $25/share preferred stock and baby bond had a bang up week. The average share moved 82 cents higher with investment grade up a stellar $1.22!! Banks were up 87 cents, mREIT preferreds up 76, CEF preferreds up 30 cents and shippers up just 15 cents.

Last week we had no income issues priced.