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Treading Water Until Tomorrows CPI Report

Equities are quiet this morning as we await the next piece of economic news which is the consumer price index which is released tomorrow. Forecasts are for a CPI up .2%. Year over year forecast is 3.3% which would be up from last month—core is forecast for up 4.7% year over year. Certainly we could see a number that is a few 1/10ths higher or lower–and either one would likely drive markets substantially. We are now in the ‘data’ gathering period in the run-up to the next FOMC meeting which 5 weeks or so out (September 19-20).

Interest rates seem to be awaiting the CPI as well as the 10 year yield is trading at 4.03% which is virtually unchanged from yesterday–we’ll see what the end of the week brings as we get these inflation gauges.

Earnings season is coming to an end and there weren’t many massive downside surprises that I saw – in particular in the banking sector. Most banks reported softer quarterly numbers but generally I didn’t see massive provisions for losses related to commercial real estate. I think that folks have been looking for these provisions BUT these things take years to play out–not months. The worrys as I understand it is for refinancings that will occur between 2023-2028. I have no idea whatsoever why 2027-2028 matters–I have not seen 1 single ‘forecaster’ who can reliably forecast interest rates for next month let alone 4-5 years out. Most certainly we will see some issues in the next year or two, but to forecast beyond the short term is simply foolhardy.

Almost nightly (Monday through Thursday) I post some interesting ‘news’ for investors in preferreds and baby bonds in the ‘Headlines of Interest’. This is a summary laundry list from a quick scan of the news release services–I try to catch most everything related to companys which have exchange traded income securities outstanding. If you aren’t taking a minute to scan these headlines you may be missing some important news items that could lead to great ideas for investing.

Early yesterday I sold 2 of my bank holdings–locking down respectable capital gains (although only 50% of what they would have been last week). I will write a little blurb this morning yet on my logic.

4 thoughts on “Treading Water Until Tomorrows CPI Report”

  1. Goldman Sachs recently released an interesting analysis on the potential impact of the corporate debt ‘Maturity Wall’ that may hit in 2024/2025.

    Not going to post links since that may be frowned upon, but I thought this community may find it interesting, so google it if you are.

    I found the chart showing the amount of companies with negative margins is historically high as a potential headwind when these maturities hit.

      1. Thanks Alpha,
        Risk is increasing of course. Any suggests for reading? Tim’s post on news related I found interesting reading but I am no expert in reading financials.

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