Party Time!! Let’s Get Crazy

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.

5 thoughts on “Party Time!! Let’s Get Crazy”

  1. I had someone who was down huge on first solar tesla takeover. Down some 75%. Sold half today up 37%.

    It doubled in 20 days. Up some 500% in a year

    1. If you prefer–at down 75% I guess you just let it ride–and once in a blue moon the market bails you out.

  2. Good morning Tim…I’ve been fading this market rally so far, took profits in Amazon after earnings and trimmed some other positions as well, including a couple of losers. The effects of the corona-virus on the global economy are a big unknown, and it may be a couple of quarters until we see how things shake out market-wise.

    1. Citadel–I would be fading it if I owned any common shares–but seldom do I. We’ll see how the corona virus shakes out–you are right it is an unknown, but certainly could impact global growth–we’ll see.

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