As everyone knows stocks are flying high today–maybe it is ‘party time’ again as Tesla (TSLA) leads the way with a crazy move higher-up $116/share right now.
Stocks are heading toward a 1 1/2% move higher while the 10 year treasury is higher by 8 basis points–a pretty healthy move higher in yields and for once in sync with the stock market.
Preferred stocks and baby bonds have pretty much disconnected from the higher yields and are moving higher–again–up about 4-5 cents right now. The chart we post multiple times a week had shown a huge gain in December and then a flattening for most of January before starting to move higher again during the last week of January and now into February. Maybe the December move was caused by folks clamouring to buy to get in before the end of December ex-dividend dates. I will be glad when my data gets out a few more months to see what trends develop–10 weeks of data is pretty unreliable.
Today we had some pretty large repurchases done by the Fed–they accepted $64.45 billion for an overnight (1 day) repurchase and a hefty $30 billion in a 14 day operation. Funny thing is they had requests for $59 billion in liquidity on the 14 day issue–somebody didn’t get the liquidity they wanted. Again it looks like the Fed is tightening the reins a bit–can it be? Remember that the Fed balance sheet, in total, has not moved higher for 6 weeks. Hum?
We will have a meaningful economic number on Friday as the employment report is released and it is one that should forecast the next few months–that is if you believe the report. The average forecast is for 165,000 new jobs.