Very early this morning – 6 a.m. the 10 year treasury was knocking on the door of 5% trading in the 4.98% area, before backing off and now trading at 4.94% up around 4-5 basis points on the day. I suspect it could take a few days before 5% is breached–but it seems to me it will make it (my wild ass guess).
In reviewing holdings my biggest hit yesterday was from CEF Tricontinental 5% $50 perpetual (TY-P)–down $2/share to the $42 area. Current yield was 5.9% area. That’s what happens when you hold a low coupon and somewhat illiquid preferred–forget that it may well be the highest quality preferred trading today. It is getting a nice bounce today (up $1.45). Last I checked their asset coverage ratio was 4200%–I suspect it is down to 4100% now.
When I see this kind of selling it makes me want to buy, buy, buy – I am tying my hands together after this note so I don’t do something irrational. Why buy at $43 when it might be $38 next month.
Today we got a number of economic pieces of news. 1st time jobless claims tumbled again–under 200,000 at 198,000–expectation was for 210,000–ugh–still looks strong. On the otherhand we had Leading Economic Indicators (LEI) come in at a -.7 softer than the -.5 expected. Existing home sales came in stronger than expected. So cross currents continue.
On top of the economic news we have way too many Fed yakkers today including Chair Powell in an hour–so we will see if these people move markets.