Monday Morning Kickoff

Last week was an exciting week for stocks as they tumbled on a number of days based upon the lack of visible progress on the trade front. The S&P 500 moved in a range of 2831 to 2934 before closing the week at 2882–off almost 2% on the week. The 10 year treasury moved lower most of last week trading in a range of 2.43% to 2.50% before settling on the week at 2.45%.

The Fed balance sheet rose by $3 billion last week after plunging lower by almost $40 billion the week before. It is obvious that the interest rate markets are just fine without bunches of new demand from the FED.

The average preferred stock and baby bond moved to $24.76 which is 7 cents lower than the week before. There are 222 issues trading at $25 or below–compared to 225 the week before.

Last week we had 2 new issues announced–but details had been limited. Tectonic Financial and Federal Agricultural Mortgage (FarmerMac) (NYSE:AGM) both announced that they would be issuing new preferred stock, but as of last Friday had not released details. FarmerMac announced they would be calling their 6.875% AGM-B issue with the proceeds of a new preferred stock. Holders of the “B” shares will take a bit of a hit on the call as shares had traded as high as $26 the last few days.

7 thoughts on “Monday Morning Kickoff”

  1. Who will China sell our Treasuries to? I think the Treasury issue is way overblown.

  2. Good morning! May I ask what might be a basic question? China threatens to pull out of US debt, I’m assuming this will cause long term yields to go up? Why then is the 30 year bond up today? TLT is up and I expected it to drop? Also TLT does not seem to move same way as preferreds? Thank you!

    1. Tough to predict what will happen. If China sells its 30-year that will only escalate things some more. I would expect yields to go up.

      However, that hurts GDP of both nations. it may spill over to other economies. That could trigger a recession or an economic slowdown. If that happens, I would expect yields to go down.

  3. Well, I missed it last week when I thought the tariffs would be a one, two or three-day story.

    After this weekends tweets, we have crossed past the point where this will quickly be resolved in my opinion. Of course, I got last week wrong, so making predictions here is worth about 2 cents.

    1. Eugene–the weekend was a nice Minnesota spring weekend–about the 1st decent weekend of the year.

      Thanks for this info–it has been a long time since these guys have had an outstanding $25/issue–they have been doing a lot of med term bonds, but years since they had an exchange traded issue.

Comments are closed.