One can’t really predict with any level of certainty to whether equity markets are going to move into a ‘melt up’ with all the cash that continues to be available in fixed income–OR whether markets will ‘melt down’ as folks decide it is time to bail out and move MORE to money market funds. I see everyone and their dog on CNBC, Fox Business and Seeking Alpha have an opinion as to which way markets will move. NONE of them know squat–but likely maybe 1/2 will be correct. Does that mean I know? Of course not, but I just say ‘I have no earthly idea’. I have no newletters to ‘push’ or special ‘morning calls’ to sell—everyone of these folks is ‘talking their book’. Very honestly these ‘gurus’ are kind of dangerous to the non thinkers–and I have concluded the number of non thinking investors out there is pretty massive–seems like most folks want to let others do the thinking–then they have someone to blame when their ‘stash’ goes south. I like the thinking of folks on this website–plenty of info to educate oneself and then make your own decision.
Last week the S&P500 moved higher by about 1.7%—not quite a record weekly close, but the close on Thursday was a record high close. There wasn’t really any economic news to push markets higher. Jobless claims were 223,000-about on forecast and historically fairly low–if folks are employed the economy marches on. Existing home sales are pretty quiet–they say the slowest since 1995–obviously the high prices and the somewhat normal mortgage rates (apparently not normal for anyone under 40 who is waiting for 3% to return) have stymied most folks. 2 high income families and old folks with cash in their pockets can do what they want–but that leaves a lot of folks on the sideline.
The 10 year treasury closed the week at 4.63% which was 2-3 basis points up on the week. Without consequential news movements were minimal. This week we do have economic news of meaning. We have the federal open market commitee (FOMC) meeting starting on Tuesday afternoon–then the ‘announcement’ and Jay Powell presser on Wednesday afternoon. Prior to the interest rate decision we have the advance estimate of GDP for Q4 on Wednesday morning. Lastly we have inflation numbers from the personal consumption expenditures (PCE) on Friday. If all that news doesn’t cause some market movements I would be surprised.
So are rates going up or down–or staying the same. For now I think they remain unchanged. There is no labor stress and inflation is kind of flattish–not at target yet–but just treading water. Almost without doubt Jay Powell wants to see more data.
The Federal Reserved Balance Sheet fell by a piddly $3 billion last week–now the balance is $6.832 trillion. Already the Fed has run off more of the balance sheet that I thought they could accomplish–the high point was right around $9 trillion. Certainly sometime in the next couple of years we will need to utilize the balance sheet for quantitative easing–so at least we have built a $2 trillion buffer (as compared to the high) of buying power.
Last week the average $25/share preferred and baby bond bounced back a bit. The overall average share was up 16 cents with investment grade issues moving 25 cents higher, banks up 18 cents with CEF preferreds up 8 cents and mREIT preferreds up 15 cents. All in all not a big up week, but at this stage anything green is good.


The AI glamour utes (Vistra, Constellation and Talen) and pipelines like KMI and WMB are off way more than Nasdaq right now. With CEG, VST and TLN off as much as 20-30% now, I wonder if margin calls are going out and loss limits are being triggered.
IMHO. if the faithful buyers are margined out, it may be a longer road back to recovery for the glamour Utes than for the Mag 7 etc: Both Bloomberg (“a fun day” and “well off the bottom”) and The Other Website (“a golden buying opportunity”) have been pushing “buy the dip” conventional AI narratives all day. JMO, DYODD.
Bear, KMI would have to be off more than a 3.8% yield for me to buy it.
Exactly – I have owned KMI a while, bought on sale when it was out of favor and bought with a nice yield. KMI has had a 60% 1-year run up. I would be hard pressed to buy it now at 3.8% divvy when there are other alternatives.
Well Bear I mis-spoke (lied) I was saying I wasn’t buying anything right now but I did buy KMI today. (Sort of ) I bought into a ETF I had a low ball GTC order in on. I guess because KMI and a few others had large drops today the ETF took a hit. I wanted to get exposure to energy and mlp’s without dealing with a K-1
AMLP?
Nope. MDST
I set a price to YOC of 7%. I wasn’t expecting it to hit my ask so quickly. I was expecting a general move down in the whole market for this to happen, which I guess Mr. Market did this morning.
This should be a warning to people that this sector is over bought if people were thinking somehow a bet on energy infrastructure would benefit from data centers needing massive amounts of energy to support AI which could be several years off.
Wonder how other sectors did today like data center Reits, construction firms specializing in power plants etc.
Lbrdp sure melting up, huge volume
Any ideas why??
If everything goes smoothly that is now a full blown Charter preferred. I guess someone figured it out finally?
PFF forced to buy it? Lol. Maybe I should set an ask of 34.75.
fc, I tripled my position in this last few months. quietly waiting for this.
fc –
I sold it all at $26+….then tried to short it at $27 but missed.
Charter deal will take another 18 months and 7% LBRDP really shouldn’t be trading well over $25 in the current environment (IMO). It is mandatory redeemable, but not for 14 years. There is a reason CHTR has fallen from $800+ to $350/share over the last 4 years.
But I can see why algos and bots look at the 2-year chart of LBRDP and think it is a BUY. Very bullish pattern.
People who get up early on the East coast like to look at how the far East Mkts closed and how the European ones are doing. Futures were down almost 400 points on the Dow and recovered at opening but still red. ( yes I’m old school)
I think everyone is a little nervous now so the “herd” could cause a stampede and drop the market causing a flight to MM. As Tim noted, there are a lot of individual investors out there who would panic.
I tidied up my accounts a little and probably could have sold more to book a little more unrealized capitol gains but I rely on some of these holdings for income so I fully expect to see some more red in my accounts.
Hopefully we get an opportunity to buy something in a panic.
Most preferred are not dropping. I suppose dividends make up for the falling tide.
For a long time it’s just been buy the S&P 500 and hold. It’s been super easy and you can just feel the complacency. One of these days, making money will not be as simple as keeping things on autopilot.
I absolutely love the first paragraph and couldn’t agree more!
Looks like mini meltdown, but does BTFD comeback by Wednesday?