Monday Morning Kickoff

Last week was a truly exciting week for investors–at least common share investors as optimism reigned supreme for most of the week.  The DJIA opened up the week at 24,364 and closed the week very near the high (25,549) at 25,538–a gain of near 1,200 points on the week.  Obviously the signal for ‘lift off’ was the speech by Fed Chair Powell on Wednesday where he sent a dovish signal for future increases in the Fed Funds interest rate.  The 10 year treasury traded in a range of 3.01% to 3.08%–closing the week at 3.01%.

Last week we had Consumer Confidence released about as expected at 135.7 against a prior reading of 137.9–while falling a bit it is not likely a sign of bad news to come.  1st revision on 3rd quarter GDP was released unchanged.  New homes sales were soft–544,000 units versus expectations of 589,000 and last months reading of 597,000.  Of course we had the Jay Powell speech on Wednesday where he put out a ‘dovish’ signal.

All markets are closed on Wednesday and economic reports will likely be carried into Thursday if they were scheduled for Wednesday.

For this week we have Construction Spending being released today and we look at this importantly and late today we have Total Vehicle Sales being released and this also is an early indicator of future strength or weakness.  Wednesday (now Thursday we think) we have the ADP employment report–not as important as the government ‘official’ report, but yet potentially important.  Friday we have the government Employment situation report and the consensus for jobs it a gain of 190,000 versus last months 250,000.

The Fed Balance sheet had a runoff last week of $9 billion versus $39 billion the week before.

Last week we had 3 new income issues priced.  Brunswick Corp (NYSE:BC) priced a new low investment grade baby bond with a coupon of 6.625%.  Utility company NiSource (NYSE:NI) priced a new ‘reset’ rate preferred with an initial coupon of 6.50%.  Lastly BDC Prospect Capital (NASDAQ:PSEC) announced a new baby bond which is investment grade with a coupon of 6.875%.  The NiSource issue is trading on the OTC Grey Market now with a current price of $24.85 under the temporary ticker of NISOP.

4 thoughts on “Monday Morning Kickoff”

  1. Today, Monday, Dec 3, there was an inversion in the treasury yield between the 3 and 5-year duration by 1 basis point. The yields on the 2 and 5-year were flat at 2.83%., and the 3-year was at 2.84%. For now, the yield on the 10-year bond still remains higher than the 2-year by 15 basis at 2.98%. Of course, one-day does not trend a make. Or,…Is this an early signal for a recession in the horizon?

    1. Was just about to add this comment about inverted yield curve when I saw you posted it. I believe we have the longest period in modern times without a recession. One will come. An inverted yield curve is generally considered a signal of a recession. Is it imminent? Not sure but I am thinking about my investments over a 5 year period. I believe the odds favor one within the next 5 years. That’s part of the reason for CTAA investment ( will call in 2021), NISOP (call in 2024), and AQN(call in 2023). Utilities and Telecommunications are the traditional safe havens and good to have in a portfolio in my opinion

    1. Thanks Eugene–will get the updates. Took a long time for the Enstar issue to move exchanges.

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