The DJIA opened last week at the 26,075 level before moving nicely higher to close the week out at 26,424. The 10 year treasury moved in the range of 2.42% to 2.54% before settling on the week at 2.50%. This is a full 10 basis points higher than the close from the previous week.
The FED balance sheet FELL by $20 billion last week–quite a drop to bring the balance sheet assets down to $3.935 trillion. The balance is thought to be headed to $3.75 trillion before the FED ends the runoff–of course we shall see what really happens–no one knows what will happen including the FED chair.
The average preferred stock and baby bond is trading at $24.72 (which is a new measurement–we used to quote just the average preferred stock). There are 226 preferred or baby bond issues trading at $25 or below (again a new measurement).
Last week we had ZERO new issues announced. After having a backlog from the government shutdown during January, coupled with wildly gyrating markets during December and January it looks like new issuance has finally been caught up.
It should be an interesting week in the markets–will interest rates move higher yet? If for any reason whatsoever we see a move higher in rates we could get a little bit of a selling panic by nervous nellies as they look to lock down profits. We would personally be more than happy to see a bit of a setback–25 or 50 cents would be fine, because after the gains YTD that we have already locked down we have plenty of cash to do some buying.