Monday Morning Kickoff

Well another weekend is gone and it is time to get serious about what the week will bring us investors. Without even looking we know that we have a deadline coming for negotiations on spending bills, which includes border security–and this could be the biggest issue of the week.

Last week the DJIA traded in a relatively narrow band of 24,883 to 25,439 before closing at 25,106. The 10 year treasury traded as high as 2.73% before closing at the low of the week on Friday at 2.63% .

The average preferred stock ended the week at $24.03 which was a dime higher than the week before. There are currently 228 $25 preferreds selling at $25 or less which is virtually unchanged from last week as prices have now stabilized in the income arena to a large degree.

Last week we had some economic data released–but once again some was delayed as a hangover of the government shutdown. The PMI Services report came in equal to last month and the PMI Manufacuring report came in soft. Consumer credit, which we believe to be important along with consumer confidence, rose for the 1st time to over $4 trillion with a monthly gain of about $17 billion. This was slower than a $22 billion increase last month.

For this week we have JOLTS (job openings and labor turnover) on Tuesday. Last month this number had fallen under 7 million for the 1st time in a while with a reading of 6.9 million–I will watch for softening here. Wednesday we have the Consumer Price Index (CPI)–the market is expecting little movement with a +.1% expected (plus .2% expected in the core rate). Watch for anything ‘hotter’ than these numbers. Retail sales for December are announced Thursday. Friday brings Consumer Sentiment–watch this for hints to future consumer retrenchment.

Last week we had 3 new income issues announced. Cherry Hill Mortgage (NASDAQ:CHMI) announced a new fixed to floating rate preferred with an initial coupon of 8.25%. The issues is trading now on the OTC Grey market under the temporary ticker CRYIP and last crossed the ticker at $24.90.

Michigan utility CMS Energy (NYSE:CMS) sold a new baby bond issue with a fixed coupon of 5.875% and a maturity way out in 2079. This issue is investment grade. There is no Grey market trading in this issue and we are not aware of any trading as of yet.

Business development company Fidus Investment (NASDAQ:FDUS) has sold a new baby bond with a fixed rate of 6%. Being a baby bond there is no OTC Grey market trading and we are not aware of any trading occurring in this new issue. It appears this issue is teed up for trading Monday under ticker FDUSZ.

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