We have a bit of a party going on in common and preferred shares as the producer price index (PPI) comes in soft at up .2% half the .4% expected. Obviously this is very good news, but with the CPI we now have 2 data points—-2. I think we may be heading to just a 1/2% rate hike in December–or even 1/4% if the November data being released just before the December FOMC meeting comes in reasonable.
The S&P500 is up just shy of 2%, while the 10 year treasury is around 3.78%—down 8 basis points.
I will do nothing unusual today – may nibble a bit on an issue or two, but ready cash is minimal so won’t do too much. To do much I would need to rearrange my t-bills etc and I am less than certain that now is the time to go crazy.
i wonder if we are close to peak interest rates (a big if) maybe it’s time to do more nibbling on preferred’s that are down a ton
not that they will rise much but maybe the downside is getting a little more limited?
just pondering
BAC is offering to buy pfds. P and M at $17 and $22. Why would I do that.
Callable at $25. Are they in trouble? I don’t get it.
Mister Z – they tendered to try to buy them back on the ‘cheap’–the tender is here.
https://www.sec.gov/Archives/edgar/data/70858/000119312522282105/d417985dex99a1a.htm
Don’t think they will be too successful with prices rising–but what the hell I guess it is worth a try–I wouldn’t take it.
Thanks Tim. On the cheap is right. I would never sell them that low,
BAC seem like good pfds. Thanks for your reply. Very helpful.
BAC is giving their view of the market & where rates are. I think their tender for each issue gives a current yield of 6.15%.
The issues are callable at $25, as you say, but that will be years away..if ever.
it’s a fair tender in my opinion – reflects current market conditions & provides a nice gain for anyone who scooped them up a month+ ago.