Well we are coming off a great week in common equities–and while I own few (if any) common equities it is always better to be heading higher than dropping like a rock. We always need our income investors to remain calm and invested–not fearful and heading for the mayonnaise jar to be buried in the back yard.
The S&P500 moved higher last week by a giant sized 3.2%–although about 1/2 of that gain came on Friday. Regardless the gains in the common equities kept preferred stocks and baby bonds from getting beat up for the week. even though the 10 year treasury rose 6 basis points higher.
The 10 year Treasury closed the week at 4.32%, which as mentioned above, was 6 basis points higher from the 4.26% closed the previous Friday. We had mixed economic news on the week with GDP fairly weak, personal consumption expenditures kind of on target with employment (from the official government report on Friday) stronger than expected. We did have the JOLTs (job openings) early in the week showing fewer openings than the previous week–so that dovetails with businesses being somewhat cautious.
This week we have the big FOMC meeting starting on Tuesday and wrapping up on Wednesday with the Jay Powell presser around 1:30 pm (central) on Wednesday. You can be certain that’s there will be plenty of fuel for market moving days this week.
The FED reserve balance sheet fell by around $18-$19 billion which I mentioned a week or so ago as the balance sheet was flat for 3 weeks in a row. Since April 1st we have been at the reduced runoff rate of $5 billion monthly of treasuries and $35 billion of mortgage securities so certainly the balance sheet is not dropping at the rate it was previous.
The average $25/share of preferred or baby bond rose in price on the week by 4 cents. Investment grade issues fell by 6 cents, bankers rose 12 cents, CEF preferreds rose 2 cents with mREIT preferreds rose 20 cents and shippers fell by 9 cents
” We always need our income investors to remain calm and invested–not fearful and heading for the mayonnaise jar to be buried in the back yard.”
Tim, with respect, I don’t agree. It is a wonderful thing for an investor when the “other guys” panic. It creates opportunities.
Not that I want other III folks to panic, I just need enough people to panic so I can make a nice profit.
https://www.youtube.com/watch?v=1LzuinD_-m8
An “H” on the sweatshirt…Harvard?
rocks,
I can’t comment without it being seen as political.
My own thesis aligns with those who think we test the lows one more time, and maybe go lower, bottoming in the SPX 4100-4500 range. I have a lot of cash on hand to deploy if/when that happens. We shall see.
I’m with you in principle. Price/Earnings values are still extremely high. Expensive stocks with macro conditions that are not looking overly promising imo.