Well we are back into the ‘wait and see’ markets with extremely quiet trading in both equities and interest rates. Yesterday the S&P500 moved in about a 1/2% range–closing up 1/4%. Interest rates moved in a 10 basis point range–closing flat on the day at 3.69%. I’m totally good with this lack of movement–doesn’t affect me at all–although it is boring I am fine collecting dividends and interest each month.
On Tuesday we will see the last major economic data point prior to the FOMC meeting which starts that day. The consumer price index last ran at 4.9% (year over year)–most forecasts I have seen are forecasting that May levels will be about the same. Will they raise Fed Funds or not? I think it is a coin toss–I think they want to raise–but I think they will pause for the time being. Honestly there is no harm in waiting a month–BUT there should be little doubt , with the current data, we will see a hike at the next meeting (July 25-26) absent substantial reductions in economic activity.
On Monday I posted an article on lodging REIT Park Hotels and Resorts (PK) discontinuing payment on some debt—is this specifically related to location (San Francisco) or is it the ‘canary in the coal mine’? We have seen both Brookfield and Blackstone walk away from office properties–and I think there will be lots more to come in the office sector as values are moving lower.
I didn’t look at my accounts yesterday, but plan to do so today and determine current opportunities that are available–and you know that I will be looking in the banking and insurance sectors (which includes the annuity providers).