Monday Morning Kickoff

Last week, which was a shortened holiday week, was again strong for stocks with the S&P500 closing at 2979 after trading in a range of 2891 to 2986–another gain of over 3%–that makes it 2 weeks in a row. This puts the index at less than 2% off a 52 week high.

The 10 year treasury moved in a range of 1.43% to 1.61% before closing at 1.55%.

All of this movement based upon a potential China deal–I would be surprised if that happens YET.

The average $25/share baby bond and preferred stock closed the week at $25.42 which is up 12 cents—this must be related to various ex-dividend dates etc that become big factors in March, June, September and December, which are large dividend payments months.  There are 130 issues trading at $25 or below–compared to 138 last week.

The Fed balance sheet moved $2 billion higher–maybe now the runoff has stopped?  We’ll see as the balance sheet is now $27 billion lower in the last 3 weeks which we believe is simply a timing issue more than a true runoff which the Fed announced was ending.

Last week we saw the announcement of many new income issues.

Capital One Financial (NYSE:COF) announced a new 5% perpetual non-cumulative issue with 60 million shares being sold.  The issue is trading on the OTC right now under ticker COFOL and last traded at $25.09.

Public Storage (NYSE:PSA) announced an offering of 4.875% cumulative preferred, which is a new low coupon for PSA in the 13 years I have been watching the company.  The issue is trading under OTC ticker PSSSP and last traded at $25.25.

Fortress Transportation and Infrastructure (NYSE:FTAI) sold a 8.25% fixed to floating rate preferred.  This cumulative issue floats starting in 2024 with a nice 6.886% spread which is added to 3 month Libor.  The issue is trading under OTC ticker FRTRP and last traded at $25.40 on Friday.  NOTE–this is a K-1 issue (partnership) for those adverse to such securities.

Additionally–although we don’t cover $1000 issues, Citigroup (NYSE:C) priced an offering of 1.5 million shares ($1.5 billion) last week at 5%.  The pricing document is here.  5% for an issue rated junk by the major ratings agencies.

Also we saw American Finance Trust (NASDAQ:AFIN) “reopened” their 7.50% cumulative preferred (NASDAQ:AFINP) with an offering of 3 million shares at $25.25.  Shares closed Friday at $25.39.

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