Last week was a big week for stocks as the S&P500 rose by near 5% last week as Fed Chair Powell yakked about being prepared to act if trade wars hurt the economy.
The 10 year treasury closed the week around 2.09% after trading in a range of 2.05% to 2.15%. Obviously interest rates are not signaling any super strength in this economy, in particular, in light of the fairly muted job numbers announced last week for the month of May.
The Fed balance sheet fell by a modest $4 billion last week so that moves us to a runoff of about $55 billion in the last 4 weeks. Certainly the timing of the runoff couldn’t be better as any potential upward pressure on rates caused by withdrawing Fed demand is masked by the global demand for treasuries as rates remain extremely low on a global basis.
The average preferred stock and baby bond closed the week at $24.91 which is a gain of 15 cents from the week before–this is the biggest move that we have seen for many months (although not very big). There are 202 issues trading at $25 or below compared to 207 last week.
Last week we had 3 new income issues announced last week.
The Gabelli Dividend & Income Trust (NYSE:GDV) announced a new 5.375% perpetual preferred. The preferred from this CEF is rated investment grade and now trading under the OTC Grey market ticker of GDVVP. This is the 4th issue that GDV will have outstanding. The 4 outstanding issues can be seen here. The shares last traded at $25.40.
First Internet Bancorp (NASDAQ:INBK) sold a new issue of baby bonds with a fixed-to-floating rate coupon. The initial coupon is 6% until it moves to floating rate in 2024. We are not aware of a ticker being announced as of yet.
Lastly Athene Holding (NYSE:ATH) sold a new fixed-to-floating rate preferred with an initial ticker of 6.35%. The issue is marginally investment grade. The issue is trading on the OTC Grey market under ticker ATHDF and is trading strongly at $25.95. This is the only exchange traded preferred issue that this company has outstanding.