I have to thank Fed Chair Jay Powell for the nice boost in my portfolios yesterday–about .4% up (50% invested in preferreds and baby bonds). On the other hand (I’m talking my book here) I really don’t want lower interest rates so quickly–the largest chunk of our CDs don’t mature until March, 2024 so if the 10 year treasury moves lower too fast – by March a bunch of the income issues move higher will be past us. What a whiner I am – I am only going to realize 5.xx% from my CDs (poor me)- it was only less than 2 years ago that an income investor got ZIP on their cash – just have to accept one can’t time these things perfectly. Portfolios are at record highs–can’t really legitimately complain.
Right now the 10 year treasury is at an amazing 3.94% which is off maybe 25 basis points from the highs yesterday. Powell was obviously much more dovish than most folks thought he would be which set off the party in stocks and bonds. It looks like we will have a minor ‘after party’ this morning. For those that are looking to ‘lock in’ decent CD rates you can get up to 5.35% this morning on eTrade and 5.35% on Fido–these short term (3 months to a year) rates will go away when Fed Funds get cut.
I mentioned I bought the PennyMac 8.50% senior notes (PMTU) and the Gladstone Land 5% term preferred (LANDM) with a 8%+ YTM. Last week I bought the General American Investors 5.95% (GAM-B) investment grade perpetual with a current yield around 6%. This is the blend I am after – some high yield and some safe, sock drawer, like issues. I also have a couple good til cancelled buy orders in for some of the Connecticut Light and Power $50/share issues in that 6.25% to 6.5% area–very illiquid so these may/may not execute.
Today we have jobless claims numbers and retail sales. Important to me, but after yesterdays dovish Fed move they seem less consequential–Jay Powell seems on a dovish flight path.