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Strong Retail Sales Push Rates Up

This morning retail sales were announced much stronger (up .7% versus up .3% forecast) than forecast. It seems that all the forecasters are using the premise that the consumer is tapped out–credit cards maxed, running out of savings etc. Well I guess this isn’t the case and interest rates are responding accordingly–now trading at 4.83%.

I think the nibble, nibble, nibble on pertual preferreds and long dated baby bonds needs to take a ‘pause’. I made 3 small nibbles last week and 2 of the 3 are underwater – with my personal conviction that rates are going higher it makes no sense to consider further adds at this time. When will I nibble again—data dependent on that determination.

Term preferreds and short dated baby bonds will not react similar to perpetuals and long dated maturity baby bonds. But just the same as long as rates continue higher there is no rush to buy even these.

3 thoughts on “Strong Retail Sales Push Rates Up”

  1. Tim we are probably at a 75% chance of another rate raise. But it might be overkill. I think things are slowing down just not enough for people to see. When Link In says they are laying off people and saying it’s because advertising and job postings are down. Course that’s office workers. How much of consumer spending is credit card is not the same as it used to be when card companies report usage. Lot of younger and older adults are using cash less and less but using cards linked to checking where payments are pulled out their accounts direct. I do that myself.

    1. Charles – you might be right – but then again who knows for sure (no one). I feel like things are slowing a bit, but it isn’t showing up in the numbers very much.

  2. Sounds like I should have put my STT-D comment I just posted in Sandbox here instead…. lol. Good place to park some hideout money imho..

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