The S&P500 fell by 1.6% last week.–but trading was in a very wide range of 3492 to 3712. Futures are up strongly this morning as the UK markets are tame and major U.S. banks are reporting solid numbes.
The 10 year treasury also moved in a fairly wide range moving between 3.84% and 4.08% before closing the week at 4.01%. Inflation numbers remained higher than expectations and there is no sign that the FED will let up on interest rate hikes. 75 basis point Fed funds rate hike is expected on 11/2 with some talking a potential for a 100 basis point hike. Interest rates are backing off to the 3.94% area this morning and with a lighter economic release week maybe we will see a calmer week.
The Fed balance sheet was essentially flat last week–moving lower by about $200 million dollars standing at $8.758 trillion.
Last week $25/share preferreds and baby bonds were trashed as the average share lost about 2.1% down 46 cents. Investment grade issues lost 54 cents, banking issues lost 48 cents and mREITs lost 43 cents. The average share price at $20.90 is at the lowest level since the week ending 4/3/2020.
We had no new income issues priced last week.
FYI…Still nibbling on fixed income.
Bought some MS-E @25.14. Also got some DEN CUSIP 24916PGB7 Muni 5%. My res is CO, so this at 4.7% tax-free is OK with me. With the QDI on the MS, the after-tax rate is still higher, but I need to diversify, too.
If we troll lower, I’d get more of the MBIN-M. This bank has been around for a 100 years. Past performance doesn’t guarantee the future, but it is low risk IMHO.
With all of the Red in my portfolio, the graph of average prices of preferreds and baby bonds makes me feel a little better—I think.
That is scary indeed with how treasuries are trading and Fed hasn’t even done any real QT yet.