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Up and Down We Go – Where We End Up Nobody Knows

Equities were down today – not dramatically, but 1/3rd% or so. Every time the market moves even a little bit lower the talking heads start the talk about it is ‘time for a retracement’ of the rally. So much nonsense – who the heck knows when the drop will come?

It does seem like the markets are waiting on Chair Powell to speak on Friday at Jackson Hole. Seems to me there is not much new that he can say other than pound home ‘inflation remains too high toward our 2% goal’. I suspect they will skip the September meeting for an increase in Fed Funds, but it is more political – they really want to raise rates–as always lots of data to be seen between now and the October 31 meeting.

Today I sold a regional banker preferred – Merchants Bancorp 6% Fixed to Floating preferred (MBINO). I sold at $21.90 – I had bought this twice back in March/April and according to my brokerage statement my gain was in the 8-9% area which included a dividend or two. Missed buying the bottom for sure, but the gain is decent for less than a 1/2 year hold. I am not seeing anything worry some in the smaller bankers but they sure have lost their momentum from a month ago and don’t want to be overly involved at this moment – maybe in a couple months.

Someone in comments mentioned yesterday they were able to pick up a year CD on eTrade at 5.70%. I checked it, but missed it–must have been a small issue that was gobbled up quick–as you might guess. Is it a sign of new rates to come – we’ll see!

I will NOT be posting headlines for the next 3 days as I will be out of the office, but will resume them on Monday evening.

5 thoughts on “Up and Down We Go – Where We End Up Nobody Knows”

  1. Yes Powell is pounding sand at Jackson Hole waiting patiently so he and the Fed can raise rates again! It’s in its DNA! Kinda like what blood letting was 200 years ago! See if the patient gets well…

    1. Payday, remember the Ghost Busters theme song “I an’t afraid of no Fed”
      It’s not the Fed you need to worry about.

  2. Tim,

    Actually it was a JP Morgan Chase 5.7% 5 Year CD not callable for one year at E-Trade. The issue sold out quickly during the day. I have just seen a new issue post this morning.

    1. What do you rate chance of call in 1-2 years of this 5 year CD with 5.7% from a great credit like JPM ?

      If the many projections of rate cuts I hear about for 2024 and certainly by 2025, seems likelihood of call before the 5 years are pretty high.

      1. If rates drop next year and quantitative easing near 100%. Gives me money to deploy when blood is in the water.

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