Well futures are way up again this morning with the S&P500 up 1.8%. The 10 year treasury yield is tumbling as well–now at 3.58%. Yesterday was a nice respite from falling prices and today looks to be more of the same. I suspect the rally will end soon and markets will turn lower-but no one knows and my actions are not based on the ‘talking heads’ blabber.
For today I am looking at buying 1 of the CHS (Cenex Harvest States) issues–I haven’t owned any of these for years due to their very high prices, but now after years at lofty levels a couple of these are trading around $25.
CHSCN which is a 7.10% reset rate issue is trading at $25.15 for a current yield of 7.06%. 1st redemption/reset date is 3/31/2024. CHSCM is a 6.75% reset rate issue trading at $24.50 for a current yield of 6.89%–1st optional redemption date/reset date is 9/30/2024. NOTE both of these issues have a ‘cap’ on the reset rate at 8%.
Buckle up for another wild ride today!
6 thoughts on “Rally Mode Again”
Seems to me that no one really wants to embrace the good old Capitalistic Market Model! It great when it bubbles and sad when it creates reversions from natural causes. It’s like Power has a remote control device on The Masses this last round of observable actions. I still believe a computer could neutrally do it better. Everything is a sine wave. The fourth dimension of the sine wave is one’s personal perception of it.
I know this is an investing site: Last two weeks:
Bot DEA in IRA, prob a trade with a div or two?, added a sliver of ENB, had a standing order EPD hit, doubled up with an add at $23.10, sold short term cash covered puts on AEM and CDE at 10-21 dates, the idea is now to let the price run away and buy the options back cheaper or end up with the shares now that interest is being shown by the public, cancelled four hairball orders on deep discount, thinly traded income securities where one got close (GJH) but free up the cash.
My own nutty sine waves.
Joel, I guess its more of a question of short term or medium to long term. A lot is psychology of the market and the swings are emotional not logical.
Look at the discussions here.
Trying to look at the crystal ball and divine the future. Look at the market the past 10 months. There has been a erosion from the highs to the market dump in June. Everyone was hearing the feds telegraphing interest rate hikes are coming and anticipating it but everyone still reacted with shock when it did happen. Now the crystal ball is murky again. Are the Feds going to continue to raise rates? Long term , short term ? When is it going to end?
On and On.
The market rebound is people betting the FEDS will back off, the economy is too fragile, they might overshoot and cause a hard landing, the news being sent out on media feeds is we can’t let this happen.
Honestly, 1/2 million or 1 million dollar homes is more than most people in this area can afford with 7% rates. So maybe the answer is prices have to come down to match the rates. This will cause a lot of pain for sellers, builders, banks etc. But its happened before.
Question guys ? Is it possible we have reached terminal treasury yields on long end while fed. fund rate continues to go up until we officially go into recession? talk about inverted
I think there is a good chance the fed may ease off now. I expect the next raise will be < 75bp unless we get a real hot read on inflation or jobs etc. The UK debacle and the Credit Suisse issues show major cracks in the global economy probably caused by the high flying dollar.
Ron Insana (who is very, very good) does a weekly interview on CNBC on Fridays after 11AM PST. He has been extremely adamant that the Fed has been way too aggressive and that something will break hard if they continue on their current “Tough Guy” path.
Even if one believes that the dumbest PhDs on the planet all seem to work at the Fed (which I do), even they must be seeing the obvious fissures that are forming in the financial markets.
mike, Absolutely no idea, we just do not know.
The fed telegraphed unambiguously that they’re willing to have a hard reset. We’re only a steps into this transition, so the pivot talk/sentiment does appear premature.
Also – if the Fed stopped now with inflation still elevated, seems we’d have a lot more to worry about because that might indicate something “broke”.
Knowing zero about tomorrow, my guess would be today’s rally will unwind, but that guess is worth about the cost of the small side of a piece of double-bubble bubble gum.
I recall you had a good plan you outlined within the last few weeks. Hope that is going well for you. We stayed in and kept buying aggressively through the bid/ask swamping sell-off. Now selling some back. Today rolled a slug of NRUC back to the market at $1.24/share higher than we paid 3 days ago. I’m decidedly not a “flipper” but this volatility is creating unusual opportunities.