It’s an orderly day as equities have been falling since 1/2 hour after the market opened. Interest rates have moved 6 basis points lower to the 3.92% area.
All eyes are on the jobs report tomorrow at 7:30 a.m. (central). Today we had jobless claims that came in at 211,000 versus expectations for 195,000–while I wish no ill will on anyone (employed folks) we need this number to trend higher–Jay Powell wants it higher (or at least he believes that is an important sign the economy is weakening). Continuing unemployment claims rose to 1.72 million. With JOLTs (job openings and labor turnover) showing 10.5 million available jobs it is hard to believe that anyone is unable to find work–but if you are a software engineer, working at the local Holiday Inn Express is not really a workable solution.
Today I went ahead and bought a bit of a 1 year JPMorgan 5.40% CD–just $5,000. This issue is callable in June so I am betting that rates will be higher in the later part of the year than they are now. Most of the CD’s I have bought are not callable–they pay 20 basis points less, but at least one can count on the rate for 2 years. I have not bought anything further out than 2 years simply because I think we will be able to do better maybe in August.
Reviewing the preferreds and baby bonds today it is kind of ugly considering that the 10 year is lower in yield by 6 basis points. I have no focus on these issues now – risk/reward isn’t adequate for now. I think the average share price may be 4% lower in a couple months–we are going back to where we started the year so thus far lightening up on preferreds and baby bonds after the January rally and moving to more CD’s and bonds has been a stellar play–we may be able to do a ‘rinse and repeat’ later this year.