Last week was kind of a crazy week. Relatively strong jobs numbers on Friday should have sent the S&P500 tumbling and the 10 year treasury yield much higher–and these reactions to the job numbers did occur–for about 15 minutes before reversing and ending higher. On the week the S&P500 fell by 1.5%.
The 10 year treasury closed the week at 4.04%—after trading in a range of 3.89% to 4.10%. The yield rose a giant sized 18 basis points higher from the close the previous Friday. With market expectations for 6 interest rate cuts this year markets were ‘set up’ for large moves on any relatively strong jobs numbers.
This week we minimal economic news Monday-Wednesday, but then we have the consumer price index (CPI) on Thursday and producer prices (PPI) being released on Friday. We may see interest rates float +/- 5 basis points Monday through Wednesday and then move strongly in one direction or the other on Thursday or Friday.
The Fed Balance Sheet fell by about $32 billion last week — a strong move lower as the reduction the last couple of weeks was relatively minimal and we are still on a $95 billion/month reduction target.
Last week was a strange week in trading of $25/share preferreds and baby bonds. While interest indicated that prices should fall–they didn’t. The average share rose 2 cents, investment grade issues fell 3 cents, banking preferreds rose 5 cents, mREIT preferreds were down 5 cents and shippers rose by 15 cents. All in all a good week for investors given the interest rate moves on the week.
Last week we had no new income issues priced. Below are the last 10 new IPOs we had in preferreds and baby bonds–pretty much trading in a strong fashion.