Last week it looked like the “tension on the tape” was broken, but then the markets again settled into tight ranges of trading.
The S&P500 traded in a range of 2896 to 2940-closing at the high for the week. Tuesday the index moved up about 1% – this was the only day that showed much movement at all.
The 10 year treasury moved in a range of 2.50% to 2.59% closing the week at the low yield around 2.50%. This occurred despite the reported 3.2% growth in 1st quarter GDP which was reported Friday.
The FED balance sheet assets fell by about $3 billion last week. With the strong GDP you can be certain that the asset runoff will continue–and probably even some talk about a FED Funds rate hike will start. It is simply way too early to worry about any further rate hikes in 2019. I had originally (last year) predicted (guessed) that we would see a hike in June–but that won’t happen.
The average preferred stock and baby bond ended the week at $24.80/share a move higher of 8 cents over the previous week. There are now 231 issues trading at or below $25/share compared to 244 last week.
Last week we had new preferred stocks announced by Regions Financial (NYSE:RF) and KeyCorp (NYSE:KEY). RF sold an issue of fixed to floating rate preferred with an initial coupon of 5.70%–it is trading on the OTC Grey Market under ticker RXFCL and last traded at $25.44. KeyCorp sold a fixed rate, investment grade preferred with a 5.625% coupon. The issue is trading on the OTC Grey market under ticker KEYLL and last was priced at $24.92.
Energy Transfer which had an new issue trading on the Grey Market under ticker ETPEP has seen the units now moved to trading on the NYSE. This is a fixed-to-floating rate (7.60% initial coupon) which starts trading under ETP-E immediately. The shares last traded hands at $24.95.
Also the Sotherly Hotels (NASDAQ:SOHO) has seen their new 8.25% preferred move to their permanent market for trading. It last changed hands at $25.23 under ticker SOHON.
Lastly REIT UMH Properties announced a re-opening of their 6.75% UMH-C preferred. They initially announced a sale of 2 million shares, but that was upsized to 3.6 million shares which put plenty of pressure on the issue. Shares fell from the $25.70 area all the way back to the $24.80 area and closed the week at $24.86. I took a position on the fall and I am looking to exit with a 1-2% gain (we hope) in the next few weeks. NOTE the issue goes ex-dividend on 5/14/2019 so we would be comfortable holding through the ex date prior to exiting.