Yesterday was a simply a ‘silly’ day in the markets.
We start with the consumer price index (CPI) which was reasonably close to forecast–year over year at 5% versus forecast of 5.1% with the core rate at 5.6% which was right on forecast. Equities opened higher fell back and started a gradual climb. Then at 1 pm (central) FOMC meeting minutes–which is old news–and equities just fall off a cliff.
Then, of course, we have Triton International (TRTN) announcing they would be bought by Brookfield Infrastructure (BIP) and the preferred shares tank–Ready, Fire, Aim. It is likely that the dividend is safe and will continue to be paid as long as Triton is performing well financially–historically the various Brookfield companies expect the company being bought to ‘pay their own way’–what I mean by this is that Brookfield isn’t there to provide deep pockets and if Triton doesn’t earn the dividend it will not be paid. Previously Brookfield Business Partners (BBU) bought Altera Infrastructure and when Altera hit financial hardships the preferred dividends were suspended and subsequently Altera was taken into Chapter 11 and preferred holders were wiped out. Many know of the DTLA properties that Brookfield Properties bought – financially troubled from the get-go dividends were suspended for many years before a bankruptcy filing occurred in recent history.
Then we have the SiriusPoint preferred (SPNT-B) shares getting hammered down $2/share because they have received interest in a possible acquisition–talk about nervous nellies.
I have no Triton shares and only a very modest position in the SiriusPoint preferreds.
So this morning we will have the producer price index (PPI) released at 7:30 a.m. (central) – don’t know if we will get much market reaction, but we also have initial jobless claims which is an important number.
I didn’t do a thing yesterday – in fact I didn’t even look at my accounts until after market close–but with a gaggle of CDs and treasuries my portfolio don’t reflect craziness.
Well let’s see how markets trade today.
19 thoughts on “Wacky Day – Silly Moves”
Up above, Tim McPartland wrote:
“Then we have the SiriusPoint preferred (SPNT-B) shares getting hammered down $2/share because they have received interest in a possible acquisition–talk about nervous nellies. I have no Triton shares and only a very modest position in the SiriusPoint preferreds…” and others reflected upon the nervousness about potential delisting of the SiriusPoint common shares, which might lead to the preferred shares being “orphaned”.
Today I noticed that the source of that nervousness (Dan Loeb, whose Third Point fund threatened to take SiriusPoint private, a move that was subsequently abandoned) had in recent days purchased quite a few SPNT-B shares:
https://www.sec.gov/Archives/edgar/data/1300345/000089914023000682/xslF345X04/form4.xml (Loeb purchases on May 22nd, 23rd, and 24th totaling 34,691 shares)
https://www.sec.gov/Archives/edgar/data/1300345/000089914023000693/xslF345X04/form4.xml (Loeb adds 105 shares on May 25th; filing dated May 30, 2023)
Thanks ESW3 – this is in interesting data point.
Looks like he joined the board in May 2022 (board seat is probably part of his agreement to end his activist campaign) and these shares are probably part of his comp package. Interesting, as these shares currently trade at a nice discount to par and are priced to yield 8.37%. The dividends are cumulative which is a feature that I look for as well.
They are not callable until 2026.
This post is helpful as I am building a list of replacements in case some of my current preferred issues get called. I don’t have a problem investing along side of Dan Loeb.
FBRT-E at 9.8% and almost $6 below par? Wow! PLEASE Franklin, don’t call it, let it stay perp! I’m already at dbl position.
Joel, Isn’t this a commercial mortgage Reit ?
Chas, Here’s an pertinent and wider answer to your question above that I was not going to go into since I had made up my mind. besides, dyodd is a respected tactic on this site. Most of this is on FBRT webpage and Franklin has a superb reputation and wide expertise, contacts, research.
All Ways…The Best!
I respect that. I have noticed Tim’s site can move a stock like JXN
I hang out on SA and don’t post much, Haven’t even broken the 1,000 barrier in comments. But I read what others have to say.
anyone own RILY prefs; the RILYL is 7.375% gapping up to 25; way out of sync with the other issues; any thoughts on why this is happening? thanks
Ted looks like there is only one other pref P and it looks similar , however the L does look like someone thinks its being called , very strong
Well ever since PSA stiffed PSB preferred shareholders…. Most ‘possible’ change of ownership is being viewed very, very negatively.
Next up is LIBOR resets concerns. “Read the prospectus” people say. Well I can’t understand them if I try. My concerns are how will they react. Will the issuers be fair or are they going to try to weasel off the hook. I was feeling OK… Until the SVB crisis started bleeding the markets. Now…. They have an excuse for bad behavior. ‘the markets made us’.
Add in bank common share prices pushing banks net worth ratios below safe levels and you can see the concern.
Ps that Captiva bot screener is out of control bad
If you Prefer — which one are you referring to – on the comment section?
I keep getting robot pictures like ‘firehydrant’ and I check off the boxes and still it won’t let me post. It’s not unusual for me to work thru 10 different robot detecting pictures. Sometimes I just give up.
Will see if I can post here, now
Ps this time no Captiva????
If you Prefer – I made a tweak – keep me posted (don’t want to go into details on tweaks).
Tim – for what its worth, I don’t even see the Captcha anymore, and I can still post. I like whatever you changed – hope it is an improvement for everyone.
Thank you Tim,
If I do see the Captcha it’s not the wack a mole over and over. It has its purpose.
You know Tim as long as SA is an open forum you can read what the public is saying and thinking. The nervousness about the SPNT B is causing a lot of buy high and sell low.
The other way to look at it is buy the rumor sell the news.
Nothing in the news so far is saying this preferred is going to get de-listed, its just rumors.
I noticed the movement on SPNT-B yesterday since I own shares. Of course when I went to look it up I typed SPNT and realized the common was up almost 9%. I reactively bought another 1/4 position of SPNT-B
PNC Financial Services kicks off Q1 earnings for regional banks tomorrow, with two dozen more regional banks reporting next week. Its going to be a bumpy ride for this market sector as investors learn how bad things really are.
Citadel–am looking forward to the regionals reporting and what their balance sheets show.
MTB-H was down over 4% yesterday at one point. The common was down slightly. Very weird but I’m guessing someone with a lot of shares wanted to get out immediately…I added to my position.