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Weekly Kickoff

Last week we had stocks move back into ‘party’ mode as the S&P500 moved higher by a giant sizes 2.9%. This appears to be related to the CPI and PPI info which came in slightly softer than expected earlier in the week which sent interest rates tumbling.

As mentioned above the yield on the 10 year treasury to a good sized tumble last week falling from 4.78% from the previous Friday all the way down to close at 4.61% on Friday.

For the coming week economic news is relatively light, and while we could be surprised none of the data should send markets plunging or flying. Of course now have the Trump administration in charge so there is no telling what sort of news could move markets. We had no news released Monday since it was a holiday and there is none scheduled for Tuesday. Leading economic indicators are released Wednesday, but this has been a market mover over the last year or two. Existing home sales and PMI (purchasing managers index) are released on Friday and typically these will not move markets.

The Federal Reserve balance sheet fell by about $20 billion last week.

The average $25/share preferred and/or baby bonds took a jump last week as one would expect given that the 10 year Treasury yield fell substantially during the week.

The average share rose by 20 cents last week, with investment grade issues jumping a huge 36 cents, banking issues jumping 33 cents, CEF preferreds were up 14 cents, mREIT issues were up 2 cents but the shippers fell by 6 cents.

Last week we had 1 new income issue sold–mortgage REIT Redwood Trust (RWT) sold a new issues of senior notes with a coupon of 9.125%. RWT has other notes and preferreds outstanding and these can be seen here. It is always best to check outstanding issues because there may be outstanding issues that are superior in some regard (i.e. yield to maturity etc).

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