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Weekly Kickoff

Last week we saw the S&P500 move up higher on the week by 1.6% as economic data last week seemed to portend a modest slowing of the economy and interest rates moved lower. Of course a slowing of the economy can cut both ways in the stock market, but for the moment equities decided it was a positive development.

The 10 year treasury yield moved sharply lower closing the week at 4.21% which was a full 22 basis points below the 4.43% close the previous Friday. The consumer price index and producer price index both came in favorable to forecast and then on Friday consumer sentiment came in quite soft. Now we will wait to see if future data shows the same–or if folks start to worry whether/when we will see a recession.

For the coming week the economic news is relatively lite. Of course we always have the weekly 1st time unemployment claims number on Thursday and we have the S&P Flash purchasing managers index (PMI) (for services and manufacturing) on Friday .

Last week the Federal Reserve balance sheet took a break from the ‘runoff’ as assets rose by $1 billion–of course the runoff continues at a monthly rate of $60 billion regardless of weekly moves.

Last week the average $25/share preferred and baby bond FELL by 5 cents–this is a week when interest rates fell hard. This occurs every 3 months as shares are ‘marked down’ on ex-dividend dates and last week was a very heavy ex dividend week. This last happened in March. Investment grade issues fell 2 cents, banking issues fell 15 cents and mREIT preferreds fell by 5 cents.

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