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Waiting for Inflation Numbers

So we are at the end of a pretty darned green week–not only in common stocks, but in preferreds and baby bonds. The question is will it continue today with PCE (personal consumption expenditures) inflation numbers being released in a couple of hours.

Last month prices rose at a 6.6% rate (year over year) which was a 40 year high. Core (PCE less food and energy) PCE rose 5.2% year over year last month and expectations are for a number today of 4.9%. These numbers could certainly set the tone for the next few days with the 10 year treasury 2.73% right now substantial deviations from expectations will moves rates in a meaningful manner.

Monday is a holiday so there will be no trading as we head into the summer.

20 thoughts on “Waiting for Inflation Numbers”

  1. Tim,
    Could you add NRZ-D to the master list when time permits?
    Thanks much, and enjoy the weekend.

  2. Plenty of 6’s at a discount going into today. Last Monday even 7’s pushed 25….and this past Monday many very strong names had a gut check. I find it amusing when some try to tell others when they should be buying. Besides a person legs into and out of a pfd so what their net position is may be unclear at best

    what I buy, and where I buy it??….. You’ll find I rarely if ever name positions. For technical reasons which I care not to elaborate on, and has nothing to do with price

  3. If anyone thinks a 1% hike in the Fed Funds rate this Summer is going to get inflation under control, then I have a couple bridges I’d like to sell you.

  4. looks like inflation is over – fed two raises and done – prices will stay high
    IG issues going back to 4%

    This is a mess. Nothing makes sense here.

    1. Pickle, I guess it doesnt really matter if it does, because if I had to rely on market timing to have followed all this, I would have been wrong. This is why I largely stay invested just with tilts to protect my backside as best as possible, not to maximize returns as that is asking too much from myself. I have done some more tilting today, and will probably look to take some profits a bit and hope for another drop in certain issues. Im up plus 4% now, and really havent had a lot of movement until past couple weeks. I am worried about QT, but dont really have an answer for that except to get out, and I am not predisposed to do such a thing.

      1. Yep, the market dived on QT fears a few years back – think it was 2016. Maybe I should lighten up on my Sachem preferreds and the few common stocks I have (LUMN, T, VZ, OHI). I would think (hope) that the short to mid-term maturities and the “call” issues should hold up well as they have so far this year. My hat’s off to you Grid – 4% ytd is fantastic. I’m down .3% thanks in part to the CDR-B screw job. Still, with the market down 10% plus and interest rates up, can’t complain too much.

        1. Actually I guess its how one does the math GR. I first benefited by an oversized for me dividend dump just after first of year from issues that went exD in December, so that built me a cushion to start. And I also have a not insignificant amount of money for me in issues that havent traded this year or are untradeable. So for example if I decided today to mark the value of the 2000 WTREP shares I own to zero like my brokerage has them, suddenly Im below 0%, lol.
          You are absolutely right, CDR-B was a total screw job. I share your pain as it was just luck I didnt get zapped either. As for many previous quarters I always played the easy divi capture with CDR-B. Being its past call status one could buy and hold a few weeks and snag the full divi holding just a few weeks. It was luck for me this deal didnt come out during that window, or I would have taken a nasty hit too. SJIJ didnt help my cause, as I just got in a starter position at $24 just in time for it to drop to $22 so I sold. But I got off the mat swinging and bought them all back and more from the $18s down to near $17.
          This does serve as a reminder that preferreds should not be viewed in total as “safer” than common stock. And this delisting and experts market thing just adds another level of risk. As we never know who is acquring who and what their intentions are with the preferreds. Knowing what the terms are in a prospectus seems to take on more importance now. But, these things werent exactly written to be understood by us commoners.

      2. I’m not sure what to worry about.
        I think QT will be so slow that nobody will notice because of all the other things going on.
        I have some good total returns in some equity positions, like Nat gas exports but domestic midstreams are flat. But total return is not a large part of my portfolio either, getting burned in 2000 and 2008 changed how I handle investments and I’m only 42, I should be playing the long game. But I guess you can say I am just positioning for the next down turn, which will eventually arrive.
        In my opinion, it’s all about the next GDP number.
        + 1/2% , we party like its 1999, no recssion
        – 1/2%, we have a real mess on our hands, all the knives come out.

        We shall see.

    2. Don’t know what’s going on I’m betting it’s a bear market rally. So I did some selling. Not a lot just enough to recoup some losses.

    1. Should’ve been buying last couple weeks…..market’s gone up way too much now to be buying.

      1. Most everyone here has been banging the drum that you have to wait until it goes back up to buy. Buying at the bottom is too risky, I guess. For an income investing site, there sure are a lot of pretend technical analysts.

        1. Just like banging the drum with Fed a year ago, inflation was “transitory” maybe?

            1. The Fed must have no patience either as they abandoned transitory long ago themselves… But then again, “Life is transitory” as one senator said in response to the Fed chairman.

              1. Yeah, I’m thinking my life may be more transitory than this round of inflation is. 😉

              2. Grid: Yeah, I heard that too, but till my favorite quote was by Musk “everybody dies “. Pretty much sums it up, it really is a zero sum game.

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