Kicking Off Another Week
By: Tim McPartland,
Well after another week has passed without major fireworks in the stock and bond markets we start another week wondering what, if anything, will derail stocks (and bonds).
The area one would expect fireworks would be in the energy related issues (primarily crude oil). It looks like even though West Texas Intermediate is trading in the $78/barrel area markets have accepted this fact and unless we get a strong downside move MLP’s will hold in there at the current levels, which is about 8% off the yearly high.
Looking over the economic calendar there is nothing that is likely to have any major affect on markets. We do see a few Fed President speeches and unfortunately these blabbermouths are the biggest risks to markets as they spout off on personal opinions—I say ‘just shut the hell up!’. These folks simply can’t just do their job without trying to find the limelight so they can get on CNBC or whatever.
Last week we made a number of purchases of shorter duration securities, while not selling perpetuals. We have reduced our cash position to 9-10% and this week are simply looking for a perpetual preferred issue to sell–replenishing cash for the next shorter duration purchase.
Interesting note is that preferred stocks CEF’s hit yearly highs last week, while the overall preferred stock issues are less than 1% off the yearly high.