Pop Goes the Weasel – I Mean Interest Rates

Can I say ‘weasel’ anymore–don’t want to offend those poor little guys. Anyway I meant to say interest rates. After being tame 1/2 of today rates have taken off and will likely close at the highest level in about a year–up about 8 basis points.

I suspect that Fed Chair Powell said something that the traders didn’t like–maybe he was not nearly convincing enough when indicating the Fed would keep rates low for a very long time.

Regardless of the cause about 70% of the investment grade baby bonds and preferreds are down today–not too much–guessing less than 1/2% (13 cents or so maybe).

Let’s look at the positive of the move–some of us added a few quality shares last week that were lower – maybe we will get to add a few more soon because again they are moving lower again.

Tomorrow we have ‘official’ employment numbers. Yesterday we had the ADP numbers and showed lower than expected job growth–what will we have tomorrow? If jobs are weakening it is a bit hard to reconcile the higher move in interest rates–but as we all know markets do what they do and moves are not always logical.

13 thoughts on “Pop Goes the Weasel – I Mean Interest Rates”

  1. Just looked at Yahoo Finance, showing BLS numbers of 379,000 jobs added in Feb. with employment at 6.2% Think it was announced yesterday 745,000 filed for unemployment less than what was expected? ADP said only 117,000 added to private payroll, so overall mixed but slowly showing improvement.
    Market futures are up, but the past week the day has started that way and ended lower.
    Lets see how the week ends out

  2. “We Won’t Be Fooled Again”….evidently the Who were a lot smarter then most Fed watchers. Was it March 2018 or so that Powell raised rates and the criminal elite resuscitated Lee Harvey Oswald? How fast before Powell got that message and rates came down again….for 20 years now we’ve heard the same story, same excuses, same media manipulation.
    Rates are never going to go up and these minor market moves might give the talking heads something to chat about but they will be short lived, are exaggerated and unimportant. Just my thought.

  3. The cancel culture crew will soon be after you for your attitude toward those poor weasels. LOL

    As to rates, Powell made a host of remarks today and obviously some of what he was saying spooked the market. Not sure what comment in particular triggered it as he babbled on about numerous things

  4. Certainly do not understand these job numbers. Here in Indiana where I live we have help wanted signs everywhere, and I mean good paying factories, not just retail and fast food. Last unemployment report was under 4%. What gives?

    1. William E – yes there seems to be plenty of jobs–but, alas, a shortage of folks that want work. I haven’t studied the detail but assume the issue remains in the hospitality business.

      1. Tim,
        Yes the hospitality business is difficult. My daughter just had a 30% cut in pay as an event planner for a company. On one hand, she was at full pay up to this time. I notice locally that hotels and restaurant business is picking up,
        But with so many in those businesses out of work it would be hard right now to find a better job.

  5. Been looking for a place for a question? as good as any I guess? Been a lot of discussions about utilities but not this one. Topic “national grid ”
    British ADR, NGG tax withholding? is dividend qualified? on my radar but want the details before pulling the trigger. thanks Mike

    1. I was looking at that over a few years ago.
      I don’t know the tax implications, however, I would be worried if the wrong people get elected and nationalize their grid over there. So personally I moved on.

      But I am looking at some Canadian utilities and telecoms with about the same yield and as a hedge to a weakening dollar. Roth account of course.

    2. Generally there is no withholding tax in the UK, but you can be charged a small ADR fee.

    3. I have held NGG in my Vanguard Taxable Account for several years and they classify the semi-annual dividend as 100% qualified and there is no UK tax withheld from the dividend when it is paid. They do deduct about a 1.0% ADR fee from the dividend (example about $1.00 from a $100 dividend).

      1. Sman, perfect explanation. better than anything I found in researching, I will assume this applies to any UK ADR so you could figure net yield as .99% of stated dividend? thanks a bunch Mike

        1. Mike, I am no expert on UK ADR fees but I believe the fees are determined by the banks that custodies the specific ADR. What I do know and will share with you are the average fees charged on the specific UK ADR’s that I own (6 in addition to NGG)…BTI 0.7% UL 1.1% DEO 0.5% GSK 1.5% BP 1.6% RDS/B 0.0%. FWIW

          1. Sman thanks for the info, very helpful saves me a bunch of time and effort. If you ever need anything or an opinion on any topic, just asks. Mike

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