For a week with a tremendous build up of tension for economic news it ended to be kind of a bust–and in this respect a bust is good. I don’t need bunches of rockets up or tumbling stocks–give me good ol’ boring – I’ll collect my dividends and interest and be very happy. I am certain we have many readers that would encourage folks to ‘ignore the noise’ and focus on making sound investments–certainly words from wise folks.
The S&P500 fell by a tiny 1/5% from the close the previous Friday. While employment news was important–and it turned out to be ‘hot’ moving interest rates higher, it obviously was news that couldn’t be overlooked by the ‘all news is good news’ crowd. We continue to have huge amounts of money sloshing around to be deployed to buy stocks–because common stocks go up forever (sarcasm)–and looking at the ever increasing balances of money market funds on deposit at major brokerages we have a ways higher to go yet.
The 10 year Treasury moved higher in yield–really quite a bunch higher–up 24 basis points from the close the previous Friday to close just short of 4% at 3.98%. As income investors, we are in the danger zone as the psycological level of over 4% could lower income issues. This is one of those things we can’t lay awake nights worrying about–at this time the trend in interest rates remains lower, although we could take a few short term dings.
This week we have the consumer price index (CPI) and producer price index (PPI) data released on Thursday and Friday–more data.
Last week the Federal Reserve balance sheet assets fell by $33 billion last week–simply an uneven continuation of the trip lower.
The average $25/share preferred stock or baby bond fell last week by 13 cents, investment grade issues fell by 15 cents, banks were of 12 cents and mREIT preferreds fell 2 cents. All in all not a bad week considering the movement higher in interest rates.
Again just after buying safe long bonds they’ve been hammered. Is it a curse?
I don’t think any of these reports is going to give the Fed enough of a reason to lower rates. Unless something unexpected happens.
I agree, SOFR creeping up again, other rates, mortgage rates; took a nice profit in SLG-Pf I of about 15% not including divs this am for extra ammo, w FED speak galore this week, world events, CPI etc. I expect maybe a bargain or two presents so will watch and wait in mmkt. ‘Cash’ is up to 52% mostly in SGOV which w 1-3mo T’s will lag on the decline, maybe? stabilize. Anything else to sell is in taxable and would whack me w s/t cap gain no thanx. Good for now, glta, have a good week. Bea
I read this morning natural gas is back up to $3.00 at Henry Hub. Shipping is High risk, still not sure I want to bet on that. The pipeline and storage companies will do good.
NG is back down to ~2.73
Pipelines are the usual first bet in the energy sector for long-term income-oriented investors, offering a combination of yield and dividend stability. WMB, ENB and KMI are popular choices. JMO. DYODD
Bear, I must have read old news or it changed again. Been reading up on LNG and shipping. Not a long term hold.
If Israel bombs/missiles any of Iran’s energy assets, Iran or Hezbollah will probably try to destroy Israeli natural gas production in the Eastern Med. Watch out for gas/LNG prices in Europe. There is also the possibility of Iran blocking the straits of Hormuz and therefore Qatar’s LNG. On the other hand, there does not appear to be any risk from Milton interrupting offshore production?
There is a lot that can go wrong in the Middle East. ‘nuf said. Long energy.
IMHO, no permanent effect from Milton on oil – Milton is eastbound to Florida’s West Coast not north bound. Reuters says there are Coast Guard imposed port restrictions at about a dozen Florida portx, which is to be expected with a massive storm Offshore platforms may close till danger passes. I believe Chevron just closed one. JMO. DYODD.
https://www.reuters.com/world/us/ports-restrict-navigation-some-oil-facilities-shut-milton-approaches-florida-2024-10-07/