November was not only a stellar month for commons stocks, but preferreds and baby bonds fully participated in the rally.
The average $25/share issue closed the month at $21.27–which is up from 10/27/23 by $1.10/share – a gain of 5.5%. While many of us that had a large allocation to treasury issues and CDs couldn’t fully participate in the rally certainly the gains we garnered were pretty spectacular—2-3% in a month is nothing to sneeze at.
Can December be as good as November? I highly doubt it – but honestly if interest rate fall by another 50 basis points it could happen. It sounds silly but if you would have asked 100 investors if we would have seen the drop in rates we have seen recently 99% of them would have said ‘no way’. So who knows–I will be happy with flat rates with a portfolio gain of 3/4% in December.
Yesterday we had personal consumption expenditures (PCE) released and the inflation numbers shown were right on forecast – no surprises to speak of as we head toward another FOMC meeting on 12/12 and 12/13. While I am all about getting all the data in I think we can call December another ‘no hike’ month, but with continued warnings that ‘we stand ready to hike rates if necessary’.
For today I doubt I will do anything–as always my ‘dry powder’ is limited–my December maturities in CDs don’t occur until 12/15/2023. I did generate some dry powder yesterday by nailing down some profits with the selling of the Hennessy Advisors 4.875% baby bonds (HNNAZ), although I still hold some shares. So I am looking to buy, but have not pinned anything down.
Interest rates are up a few basis points this morning–equities are off a little (the S&P500), but none of the moves are meaningful and certainly mean nothing for the balance of the day. We do have some minor economic news and Fed Chair Powell speaking today.