Monday Morning Kickoff

We are staring into a potentially exciting week with spiking oil prices, because of the Saudi attacks and because of the 1/4% Fed Funds rate cut we will most likely see on Wednesday.

Last week the S&P 500 traded in a range of 2969 to 3020, within a hair of a new high.

The 10 year treasury traded in a wide range of 1.50% to 1.90% before closing the week at the high at 1.90%.

The average $25/share baby bond and preferred stock closed the week at $25.22 which is a full 20 cent drop from the previous week.

We have 146 issues trading under $25/share now compared to 130 issues the week before.

The Fed Balance Sheet grew by $8 billion last week which seems to point to a leveling out of the balance sheet asset total–we will need about 4 more weeks to confirm that the Fed is neutral in this particular aspect of Fed policy.

Last week we saw a number of new income issues announced.

South Jersey Industries (NYSE:SJI) announced a new baby bond with a coupon of 5.625%.

Saul Centers (NYSE:BFS) announced a new fixed rate preferred with a coupon of 6%.

Bank of America (NYSE:BAC) announced a new 5% non cumulative preferred.

mREIT AG Mortgage Investment (NYSE:MITT) announced a new issue with a a fixed-to-floating rate coupon. The initial rate is 8%.

Fifth Third Bank (NASDAQ:FITB) announced a new preferred with a 4.95% fixed rate coupon.

Lastly Rexford Industrial Realty (NYSE:REXR) announced a new fixed rate 5.625% preferred.

More data on all these issues can be bound by skimming down homepage where all data is announced and kept.

4 thoughts on “Monday Morning Kickoff”

  1. Tim,
    Not that it matters much, but when calculating the
    $25/share baby bond and preferred stock week average,
    in those weeks with many distributions, like last week,
    the average may be lower, not
    indicative of a real movement, but merely reflecting the fact of the many distributions.

    When trying to analyze the average weekly change, I try to compute
    the average using the price of each preferred PLUS its distribution (if occurred in this week), or sometimes, just the average of those preferreds that did not have a distribution this week.

    THis is a minor, pedantic observation that can easily be ignored, but
    in any case thanks a lot for all your excellent work!

    1. daniel–you are correct–the 3,6,9,12 months are very heavy in ex-dividend dates which skews the ‘average’ quite a bit of the time.

  2. Good morning Tim…I’ve been mulling over whether the attack on Saudi oil terminals increases or decreases the chance of a half point rate cut on Weds. My guess is the odds of a half point cut get better the more turmoil there is in the markets, so a big selloff this week improve the chances of a half point cut.

    1. I think any potential global clash can have an affect on the FED–but I don’t think this one will get much play with them–the long term affects will be minimal, although certainly for weeks (or even months) we could all be paying 20 or 30 cents more for our gasoline. I am looking for just a 1/4% cut–I don’t think markets warrant more even though some of the recent economic data indicates weakness in manufacturing and employment which is softening–potentially balanced with higher inflation per numbers last week. I think all this tinkering with interest rates is mostly like pushing on a string-consumers aren’t like to spend more with minor changes in the short term rates.

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