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.