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Monday Morning Kickoff

Common stocks rocketed higher last week by almost 6%. The entirety of the gain came on Thursday and Friday after the slightly softer inflation numbers were released on Thursday morning. Futures are off by a tiny amount this morning (6 a.m. central) so maybe we will see a few days of digestion in the markets.

The 10 year treasury yield plunged from the 4.15% area to as low as 3.81% on Thursday–bond markets were closed for the Veterans Day Holiday. Of course rates were reacting to the slightly softer inflation figures from Thursday morning. I believe that we will see rates rise somewhat in the coming week as the reality of the inflation numbers being only 1 data point sinks into investors minds–and enthusiasm subsides. At 6 a.m. Monday the 10 year is at 3.89%–up 8 basis points.

The Federal Reserve balance sheet numbers were not released for last week on Friday as is the norm because of the Veterans holiday–we should see the numbers released non Monday.

The average $25/share preferred stock and baby bonds rode a rocket higher on Thursday last week and to a smaller degree on Friday as the average share rose 90 cents. investment grade issues rose 85 cents, banks by 88 cents and mREITs by 99 cents. Shipper rose by a measly 4 cents.

Again last week we had no new issues priced.

10 thoughts on “Monday Morning Kickoff”

  1. Hi guys

    Quick one. what are the solvency, financial ratios you take care of before buying either Babys or Preferred stocks?

  2. Fidelity rated the financial health of FOSL a 66/100?

    While its Interest coverage +4.4x,Sep-30-2022. Anything over 1.5X is adequate to cover debt interest.

        1. I fumbled around and found it. Under “analysis and sentiment” Anyway, ABR financial strength is 9/100, but “quality” is 71/100. Seems incongruous.

          Check out RITM. Quality is 99. Financial health is 93. With ratings like that, their preferreds should sell at a premium!

  3. Morning all – hoping for another great week for our preferreds.

    Anyone have insight or comments on fosll?

    Thank you

    1. FOSLL is the 7% senior note of The Fossil Group a fashion accessory business with significant global brand recognition. If you think the company will survive (as I do) until the note matures in four years, it pays a healthy current yield of almost 10% and trades at a 30% discount to par.

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