Monday Morning Kickoff

Last week was a relatively positive week with the DJIA having a low of 24,518 and a high 25.043 — with a close near the high of 25,019 with shares moving higher based on optimism for announcements of higher earnings in the weeks ahead.  Interest rates didn’t act in the manner that would normally be expected (would expect higher rates with positive stocks) as the 10 year interest rate traded in a range of 2.83% to 2.87% before closing the week at 2.83%.

For the coming week we have the Trump-Putin summit happening on Monday.  We don’t think this has much meaning economically speaking.  Retail Sales are also announced Monday.  Tuesday we have Industrial Production and Capacity Utilization.  On Wednesday we have Mortgage ApplicationsHousing Starts and Building Permits – none of which on their own have the ability to move markets, but may give some economic hints for the next few months.  Also on Wednesday is the release of the Fed Beige Book and this may be somewhat enlightening for the future–but it isn’t going to move markets.  Thursday brings the Philly Fed Manufacturing Survey as well as the weekly jobless claims.   It is interesting that I can remember a time when any one of these items could have moved markets, but for the most part those days are gone.  With the 24 hour news cycle and political considerations on a global basis there are so many items to digest that no single item of economic data any longer dominates markets–all of which are fine with us.  We are always most happy to simply collect dividends and interest as markets remain in Goldilocks mode.

Last week the Fed balance sheet grew by $2 billion so there was no added pressure on interest rates from run off which had been running quite strong the last few weeks.

Last week we didn’t have any new income issues announced–the dog days of summer are upon us in many ways and new issuance is one of them.  We did have 1 new issue start trading and that was the Priority Income Fund term preferred issue.  The issue should be trading today under the permanent ticker (PRIF-A) after closing last week at $24.45.

The average $25 preferred stock last week was off 1 penny with 145 issues now trading under $25/share compared to 140 the prior week.

So with the dog days upon us we will be most likely passively watching the markets.  We continue to be buried with our real estate work, although normally it would be quite slow as August approaches–we would be most happy to have a break from 7 day a week appraisal work.

 

 

2 thoughts on “Monday Morning Kickoff”

  1. Tim, On July 3rd you said regarding the new Priority Income Fund preferred: “we may be a buyer of this issue later in the week.” I was just wondering what you think about it now.

    1. Hi Andrew–yes we thought being a term preferred it may be a buy–but after further review and contemplation it is too risky for us. They have very high fees (I think 12%) for investors and being a non traded fund we don’t want to open ourselves up for a ‘surprise’ when they announce some big loss in net asset value.

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