Economy:
I would not call this worrisome-yet-when looking at national statistics: Housing is the least affordable in 10 years-MarketWatch There are already localities where the median price home is no longer affordable to most median income households. The national trend is a negative one and will likely continue in that direction, assuming continued increases in mortgage interest rates and home prices, made worse in localities where federal limits on mortgage interest deduction come into play.
I would not call this worrisome-yet-when looking at national statistics: Housing is the least affordable in 10 years-MarketWatch There are already localities where the median price home is no longer affordable to most median income households. The national trend is a negative one and will likely continue in that direction, assuming continued increases in mortgage interest rates and home prices, made worse in localities where federal limits on mortgage interest deduction come into play.
Philly Fed manufacturing index slows in June - MarketWatch (declines to 19.9 in June from 34.4 in May)
EU to impose tariffs on $3.2 billion of U.S. goods starting Friday - MarketWatch EU adopts rebalancing measures in reaction to US steel and aluminum tariffs; List of of imports from the US which will be imposition of additional duties (this was expected)
In a 5-4 decision that provided a somewhat unusual mix of Justices on both sides, the Supreme Court held that states may collect sales taxes from retailers even where the retailer has no physical presence in the state. South Dakota v. Wayfair, Inc. (06/21/2018), overturning Quill Corp. v. North Dakota, 504 U.S. 298 (1992). This may modestly help some box retailers. While Amazon collects sales taxes now when it sells a product, it has not been collecting sales taxes when it is the intermediary between a third party seller and an Amazon customer.
Majority: Kennedy, Ginsberg, Thomas, Alito and Gorsuch
Dissent: Chief Justice Roberts, Breyer, Sontomayor and Kagan
The Wayfair decision is possibly more important to the creditworthiness of general obligation municipal bonds from several issuers as it will improve revenue collections. It will be a negative for most pure internet retailers.
In a 5-4 decision that provided a somewhat unusual mix of Justices on both sides, the Supreme Court held that states may collect sales taxes from retailers even where the retailer has no physical presence in the state. South Dakota v. Wayfair, Inc. (06/21/2018), overturning Quill Corp. v. North Dakota, 504 U.S. 298 (1992). This may modestly help some box retailers. While Amazon collects sales taxes now when it sells a product, it has not been collecting sales taxes when it is the intermediary between a third party seller and an Amazon customer.
Majority: Kennedy, Ginsberg, Thomas, Alito and Gorsuch
Dissent: Chief Justice Roberts, Breyer, Sontomayor and Kagan
The Wayfair decision is possibly more important to the creditworthiness of general obligation municipal bonds from several issuers as it will improve revenue collections. It will be a negative for most pure internet retailers.
+++++++
Markets and Market Commentary:
The stock market is reacting negatively in pre-opening trading to Donald's latest trade threats:
Trump seeks curbs on Chinese investment in U.S. tech firms, exports to China - MarketWatch;
China, Europe Warn Trade War Could Trigger Global Recession - Bloomberg
Trump is reportedly planning new restrictions against China: CNBC
The stock market is reacting negatively in pre-opening trading to Donald's latest trade threats:
Trump seeks curbs on Chinese investment in U.S. tech firms, exports to China - MarketWatch;
China, Europe Warn Trade War Could Trigger Global Recession - Bloomberg
Trump is reportedly planning new restrictions against China: CNBC
Jim Mellon: Market sell-off in US stocks start of major correction: CNBC
Donald thought that Brexit would be good for the U.K. Two years after Brexit vote, these charts show the U.K. economy losing momentum - MarketWatch
The stock market lost some upward momentum last Friday after this Trump tweet, a Donald position which was not new news:
I would note that the U.S. has a 25% tariff on light truck exports to the U.S. which seems to have been overlooked by Donald. The Big Three's Shameful Secret | Cato Institute That tariff raises consumer costs for U.S. built pick-ups.
Trump greets EU trade reprisals with threat of steep auto tariff | Reuters
Interestingly, Daimler will soon have to pay a tariff on Mercedes SUVs shipped from its factory in Alabama to China. Daimler Becomes First to Predict Profit Hit on Trade War-Bloomberg BMW also ships vehicles made in the U.S.A. to China.
EU to respond to any U.S. auto tariff move: report | Reuters
Kraft interested in buying Campbell Soup
The 1 month treasury bill now has a yield close to the S & P 500 dividend yield. 2018 Daily Treasury Yield Curve Rates The SPX dividend yield was at 1.89% last Friday: P/Es & Yields on Major Indexes - Markets Data Center - WSJ.com
The Vanguard Prime Money Market fund has reached a 2% yield. VMMXX-Vanguard Prime Money Market Fund | Vanguard
Donald thought that Brexit would be good for the U.K. Two years after Brexit vote, these charts show the U.K. economy losing momentum - MarketWatch
The stock market lost some upward momentum last Friday after this Trump tweet, a Donald position which was not new news:
I would note that the U.S. has a 25% tariff on light truck exports to the U.S. which seems to have been overlooked by Donald. The Big Three's Shameful Secret | Cato Institute That tariff raises consumer costs for U.S. built pick-ups.
Trump greets EU trade reprisals with threat of steep auto tariff | Reuters
Interestingly, Daimler will soon have to pay a tariff on Mercedes SUVs shipped from its factory in Alabama to China. Daimler Becomes First to Predict Profit Hit on Trade War-Bloomberg BMW also ships vehicles made in the U.S.A. to China.
EU to respond to any U.S. auto tariff move: report | Reuters
Kraft interested in buying Campbell Soup
The 1 month treasury bill now has a yield close to the S & P 500 dividend yield. 2018 Daily Treasury Yield Curve Rates The SPX dividend yield was at 1.89% last Friday: P/Es & Yields on Major Indexes - Markets Data Center - WSJ.com
The Vanguard Prime Money Market fund has reached a 2% yield. VMMXX-Vanguard Prime Money Market Fund | Vanguard
+++++++
Bond Notices:
I have set up in my Fidelity account an email notification whenever there is a bond credit rating change.
I own several Memphis Tennessee municipal bonds and received the following notices about a Fitch upgrade to AA from AA-:
JP Morgan's senior unsecured debt was also upgraded by Fitch:
++++
Early Bond Redemption:
Abbott Laboratories redeemed its 2.35% senior unsecured bond maturing on 11/22/19 early. Bond Detail This was a partial redemption at par value plus accrued and unpaid interest:
The prospectus for this bond does contain a standard make whole provision that requires the issuer to pay the greater of par value plus accrued and unpaid interest or the sum of the principal amount and all remaining interest payments discounted to present value using the yield on a treasury security with the same time period to maturity (plus a small premium to that discount rate which was .2% for this bond).
Make Whole Provision:
A bond investor needs a working knowledge of how a make whole provision impacts the optional redemption price, though it is not possible for those without software and access to the treasury yield data to calculate the precise amount.
Since the treasury rates for short maturities have risen, the discount rate has been increasing, and those increases in the discount lower the sum payable in the present value calculation. The end result is that the issuer can redeem a short term note early without paying a penalty.
Early redemptions of short term $1K par value bonds has been increasing as of late which is fine. I bought the bonds at a discount and can generally invest the proceeds to generate more income. Since this was a partial redemption, one option would simply be to buy the bond back at less than par value.
Fidelity redeemed my entire lot, which was just two bonds, as part of this partial redemption but left alone another 2 bond lot held by a family member whose account is managed by me. The minimum lot trade for this bond is 2 bonds so the broker could not redeem 1 bond from my account and 1 bond from the family member. In a prior early redemption involving a Mylan bond, the same issue was present but Fidelity took 2 bonds from the family member's account to satisfy the partial redemption and left my 2 bonds alone. This is how it goes, back and forth like that. I have no input into what the broker is doing to satisfy the issuer's partial redemptions.
+++++
Bond Notices:
I have set up in my Fidelity account an email notification whenever there is a bond credit rating change.
I own several Memphis Tennessee municipal bonds and received the following notices about a Fitch upgrade to AA from AA-:
Early Bond Redemption:
Abbott Laboratories redeemed its 2.35% senior unsecured bond maturing on 11/22/19 early. Bond Detail This was a partial redemption at par value plus accrued and unpaid interest:
The prospectus for this bond does contain a standard make whole provision that requires the issuer to pay the greater of par value plus accrued and unpaid interest or the sum of the principal amount and all remaining interest payments discounted to present value using the yield on a treasury security with the same time period to maturity (plus a small premium to that discount rate which was .2% for this bond).
Make Whole Provision:
A bond investor needs a working knowledge of how a make whole provision impacts the optional redemption price, though it is not possible for those without software and access to the treasury yield data to calculate the precise amount.
Since the treasury rates for short maturities have risen, the discount rate has been increasing, and those increases in the discount lower the sum payable in the present value calculation. The end result is that the issuer can redeem a short term note early without paying a penalty.
Early redemptions of short term $1K par value bonds has been increasing as of late which is fine. I bought the bonds at a discount and can generally invest the proceeds to generate more income. Since this was a partial redemption, one option would simply be to buy the bond back at less than par value.
Fidelity redeemed my entire lot, which was just two bonds, as part of this partial redemption but left alone another 2 bond lot held by a family member whose account is managed by me. The minimum lot trade for this bond is 2 bonds so the broker could not redeem 1 bond from my account and 1 bond from the family member. In a prior early redemption involving a Mylan bond, the same issue was present but Fidelity took 2 bonds from the family member's account to satisfy the partial redemption and left my 2 bonds alone. This is how it goes, back and forth like that. I have no input into what the broker is doing to satisfy the issuer's partial redemptions.
+++++
Trump:
'How Democracies Die' Authors Say Trump Is A Symptom Of 'Deeper Problems' : NPR
Trump's approval rating among republicans has hit 90%. Trump Job Approval
President Trump seems to be saying more and more things that aren’t true (False is True; True is False)
House GOP plan would cut Medicare, Medicaid to balance budget
I have been trying to decide whether Paul Manafort or Corey Lewandowski, both former campaign managers for Donald, has the darker soul. Lewandowski moved closer to Manafort with this comment: Former Trump Campaign Manager Corey Lewandowski mocks immigrant child with Down syndrome - ABC News; Ex-Trump campaign manager Lewandowski under fire for mocking disabled migrant child - MarketWatch I can understand Donald's attraction to both men since darkness envelops and consumes him.
Opinion | How Trump Corrupts the Rule of Law - The New York Times
++
If someone dares to hold up a sign that Trump does not favor, the person will be escorted out of the building by security after Donald identifies them, makes a derogatory remark about them and then demands their extrication for exercising their First Amendment right peacefully and without disruption.
This happened at one of Donald's recurring campaign rallies for the True Believers. The offending sign was a picture of Donald and a former friend who is a convicted pedophile.
Trump Mocks Protester at Rally: 'Man or Woman?' (Trump: “Get ‘em outta here. Go home to your mom, darling. Go home,” as Trump supporters either booed the man for his audacity or chanted "USA", though no one heard "Lock Him Up". Pictures taken by photographers of the Trump followers showed people consumed by anger at the protestor. Trump then added this statement for good measure:“Was that a man or a woman because he needs a haircut more than I do?” Trump said as his fans cheered. “Couldn’t tell, couldn’t tell. I couldn’t tell. Needs a haircut.” The Trumpsters were in heaven.)
Before that rally started, the arena scoreboards promoted Donald's twitter account as "Your source for Real News". When Trump attacked the "Fake News Media" as being dishonest, and referred to the reporters who were seated in the back of the arena, the True Believers started booing the reporters, yelling at them and then started their predictable loud chant of "CNN Sucks". The WP has several audios of Trump and the Trumpsters at this rally. How a crowd at a Trump rally responds: An audio analysis - Washington Post
+++++
Trump's Fraudulent Voting Fraud Allegations:
I have discussed Trump's effort to undermine American democracy in several previous posts. {e.g. Stocks, Bonds & Politics: Trump and Massive Voter Fraud Allegations-Cover For Voter Suppression (2/13/17 Post); The GOP and First Amendment Conservative Values (1/29/17 Post)}
The GOP's continuous efforts to undermine the right to vote by preventing voters, who do not vote the right way, from casting ballots was given a blow by a federal district court judge, Julie A. Robinson. Kobach-ruling.pdf
The Court found after a lengthy trial that Kobach failed to prove that a significant number of votes were cast illegally. Instead, Kobach managed only to prove that at "most, 67 noncitizens registered or attempted to register in Kansas over the last 19 years,” and "only 39, at most, actually ended up on voter rolls, put there largely by clerical mistakes, not fraud." Kris Kobach gets a smackdown - The Washington Post
Kobach was picked by Donald to lead his fraudulent voting fraud commission that was later disbanded.
'How Democracies Die' Authors Say Trump Is A Symptom Of 'Deeper Problems' : NPR
Trump's approval rating among republicans has hit 90%. Trump Job Approval
President Trump seems to be saying more and more things that aren’t true (False is True; True is False)
House GOP plan would cut Medicare, Medicaid to balance budget
I have been trying to decide whether Paul Manafort or Corey Lewandowski, both former campaign managers for Donald, has the darker soul. Lewandowski moved closer to Manafort with this comment: Former Trump Campaign Manager Corey Lewandowski mocks immigrant child with Down syndrome - ABC News; Ex-Trump campaign manager Lewandowski under fire for mocking disabled migrant child - MarketWatch I can understand Donald's attraction to both men since darkness envelops and consumes him.
Opinion | How Trump Corrupts the Rule of Law - The New York Times
++
If someone dares to hold up a sign that Trump does not favor, the person will be escorted out of the building by security after Donald identifies them, makes a derogatory remark about them and then demands their extrication for exercising their First Amendment right peacefully and without disruption.
This happened at one of Donald's recurring campaign rallies for the True Believers. The offending sign was a picture of Donald and a former friend who is a convicted pedophile.
Trump Mocks Protester at Rally: 'Man or Woman?' (Trump: “Get ‘em outta here. Go home to your mom, darling. Go home,” as Trump supporters either booed the man for his audacity or chanted "USA", though no one heard "Lock Him Up". Pictures taken by photographers of the Trump followers showed people consumed by anger at the protestor. Trump then added this statement for good measure:“Was that a man or a woman because he needs a haircut more than I do?” Trump said as his fans cheered. “Couldn’t tell, couldn’t tell. I couldn’t tell. Needs a haircut.” The Trumpsters were in heaven.)
Before that rally started, the arena scoreboards promoted Donald's twitter account as "Your source for Real News". When Trump attacked the "Fake News Media" as being dishonest, and referred to the reporters who were seated in the back of the arena, the True Believers started booing the reporters, yelling at them and then started their predictable loud chant of "CNN Sucks". The WP has several audios of Trump and the Trumpsters at this rally. How a crowd at a Trump rally responds: An audio analysis - Washington Post
+++++
Trump's Fraudulent Voting Fraud Allegations:
I have discussed Trump's effort to undermine American democracy in several previous posts. {e.g. Stocks, Bonds & Politics: Trump and Massive Voter Fraud Allegations-Cover For Voter Suppression (2/13/17 Post); The GOP and First Amendment Conservative Values (1/29/17 Post)}
The GOP's continuous efforts to undermine the right to vote by preventing voters, who do not vote the right way, from casting ballots was given a blow by a federal district court judge, Julie A. Robinson. Kobach-ruling.pdf
The Court found after a lengthy trial that Kobach failed to prove that a significant number of votes were cast illegally. Instead, Kobach managed only to prove that at "most, 67 noncitizens registered or attempted to register in Kansas over the last 19 years,” and "only 39, at most, actually ended up on voter rolls, put there largely by clerical mistakes, not fraud." Kris Kobach gets a smackdown - The Washington Post
Kobach was picked by Donald to lead his fraudulent voting fraud commission that was later disbanded.
++++++
Donald's Efforts to Sabotage House Republicans on Immigration Legislation:
The House republicans can not agree on an immigration plan so Trump has decided to lay the blame on Democrats. I would remind Donald that the republicans have a sufficient majority in the House to pass whatever they want, provided they can come to an agreement among themselves without too many dissenters. Last Thursday, 41 House republicans voted against a GOP drafted hard line immigration bill: Final Vote Results for Roll Call 282
So the Red Wave is coming in November. I have a news flash for Donald. The odds of republicans acquiring a 60 vote senate majority is nil, even in the upcoming election where a number of Democrat senators are running for reelection in states carried by Donald. Donald wants to end the Senate filibuster rule. Okay. Go ahead. When the Democrats take majority control of both the Senate and House, and the presidency, what goes around will come around.
These tweets represent IMO a recognition that the House republicans were unable to reach an agreement among themselves so Donald resorted to blaming the Democrats who would never agree to the hard line immigration proposals favored by the modern day GOP.
With an aging workforce, anemic productivity, and slowing birthrates, the U.S. economy needs immigration to grow, but that concept is beyond the comprehension of far too many voters.
It is far easier for the republicans to demonize immigrants for political purposes and to adopt without question the frequently false narratives designed to manipulate them.
Localities, where there are a lot of legal and illegal immigrants, tend to have lower crime rates. Two charts demolish the notion that immigrants here illegally commit more crime - The Washington Post That is not to say that Donald can not bring forth examples of American citizens murdered by illegals, as he did last Friday.
President Trump's week detached from reality: CNBC
The 14 Most Common Arguments against Immigration and Why They're Wrong | Cato @ Liberty
Facts About Immigration and the U.S. Economy: Answers to Frequently Asked Questions | Economic Policy Institute
The Immigration Effect
++++
Trump administration puts skimpy health insurance plans in place | Reuters This particular GOP plan will raise premiums for those who need more comprehensive coverage. Healthier people may choose a less costly skimpy plan, which may end up providing inadequate health insurance coverage for them, while sicker people will remain on Obamacare. The result of the GOP's plan is to drive up premiums for those citizens and that consequence is the intended result. The skimpy plans will also drive up the cost of special healthcare services, like addiction and pregnancy care, where most skimpy plan participants would chose to exclude those coverages, thereby driving up the cost for buyers of skimpy plans that include one or more of them. That is the intended result also of this GOP plan.
How the Koch Brothers Are Killing Public Transit Projects Around the Country - The New York Times
Commerce chief Wilbur Ross financial holdings eyed in report; Lies, China And Putin: Solving The Mystery Of Wilbur Ross' Missing Fortune: Forbes; Wilbur Ross Denies Insider Trade in Shorting Russia-Linked Firm - Bloomberg
U.S. withdraws from U.N. Human Rights Council over perceived bias against Israel-The Washington Post
GOP Candidate Suggests Diversity In America Will Spark Civil War (Seth Grossman, the GOP's candidate for Congress in New Jersey's Second Congressional District, asserted that the "whole idea of diversity is a bunch of crap and Un-American"); Right-wing pundit and congressional candidate Seth Grossman posted bigoted commentaries about Black and Muslim people This race is believed to be a competitive one. The seat is currently held by the republican Frank LoBiondo who has decided to retire. Trump carried the district 50.6% to 45.4% after Obama won it twice.
Did the Obama Administration Separate Families? - FactCheck.org (there was no automatic separation as with Trump's policy. There "may" have been some temporary separations at the border, but that was only when "the family relationship could not be established, child trafficking was suspected, or there were not sufficient family detention facilities available.")
Trump Garbles Canadian Trade Stats - FactCheck.org
Melania Trump wears a 'I don't care' coat to visit migrant kids in Texas; Melania Trump Wore a Jacket Saying ‘I Really Don’t Care’ on Her Way to Texas Shelters
Donald threw some starburst candies at Merkel at the G-7 meeting, uttering this line that a four year old brat might say during a hissy fit: ‘don’t say I never give you anything’ .
GOP Senators call on National Science Foundation to investigate climate change grants
In age of Trump, evangelicals back self-styled top U.S. pimp: Reuters (well, of course, just look at their support for Roy Moore and their reaction to all of the women who accused Donald of sexual assaults, and the Access Hollywood tape. Might as well go all in and support a pimp.)
Donald's Efforts to Sabotage House Republicans on Immigration Legislation:
The House republicans can not agree on an immigration plan so Trump has decided to lay the blame on Democrats. I would remind Donald that the republicans have a sufficient majority in the House to pass whatever they want, provided they can come to an agreement among themselves without too many dissenters. Last Thursday, 41 House republicans voted against a GOP drafted hard line immigration bill: Final Vote Results for Roll Call 282
So the Red Wave is coming in November. I have a news flash for Donald. The odds of republicans acquiring a 60 vote senate majority is nil, even in the upcoming election where a number of Democrat senators are running for reelection in states carried by Donald. Donald wants to end the Senate filibuster rule. Okay. Go ahead. When the Democrats take majority control of both the Senate and House, and the presidency, what goes around will come around.
These tweets represent IMO a recognition that the House republicans were unable to reach an agreement among themselves so Donald resorted to blaming the Democrats who would never agree to the hard line immigration proposals favored by the modern day GOP.
With an aging workforce, anemic productivity, and slowing birthrates, the U.S. economy needs immigration to grow, but that concept is beyond the comprehension of far too many voters.
It is far easier for the republicans to demonize immigrants for political purposes and to adopt without question the frequently false narratives designed to manipulate them.
Localities, where there are a lot of legal and illegal immigrants, tend to have lower crime rates. Two charts demolish the notion that immigrants here illegally commit more crime - The Washington Post That is not to say that Donald can not bring forth examples of American citizens murdered by illegals, as he did last Friday.
President Trump's week detached from reality: CNBC
The 14 Most Common Arguments against Immigration and Why They're Wrong | Cato @ Liberty
Facts About Immigration and the U.S. Economy: Answers to Frequently Asked Questions | Economic Policy Institute
The Immigration Effect
++++
Trump administration puts skimpy health insurance plans in place | Reuters This particular GOP plan will raise premiums for those who need more comprehensive coverage. Healthier people may choose a less costly skimpy plan, which may end up providing inadequate health insurance coverage for them, while sicker people will remain on Obamacare. The result of the GOP's plan is to drive up premiums for those citizens and that consequence is the intended result. The skimpy plans will also drive up the cost of special healthcare services, like addiction and pregnancy care, where most skimpy plan participants would chose to exclude those coverages, thereby driving up the cost for buyers of skimpy plans that include one or more of them. That is the intended result also of this GOP plan.
How the Koch Brothers Are Killing Public Transit Projects Around the Country - The New York Times
U.S. withdraws from U.N. Human Rights Council over perceived bias against Israel-The Washington Post
GOP Candidate Suggests Diversity In America Will Spark Civil War (Seth Grossman, the GOP's candidate for Congress in New Jersey's Second Congressional District, asserted that the "whole idea of diversity is a bunch of crap and Un-American"); Right-wing pundit and congressional candidate Seth Grossman posted bigoted commentaries about Black and Muslim people This race is believed to be a competitive one. The seat is currently held by the republican Frank LoBiondo who has decided to retire. Trump carried the district 50.6% to 45.4% after Obama won it twice.
Did the Obama Administration Separate Families? - FactCheck.org (there was no automatic separation as with Trump's policy. There "may" have been some temporary separations at the border, but that was only when "the family relationship could not be established, child trafficking was suspected, or there were not sufficient family detention facilities available.")
Trump Garbles Canadian Trade Stats - FactCheck.org
Melania Trump wears a 'I don't care' coat to visit migrant kids in Texas; Melania Trump Wore a Jacket Saying ‘I Really Don’t Care’ on Her Way to Texas Shelters
Donald threw some starburst candies at Merkel at the G-7 meeting, uttering this line that a four year old brat might say during a hissy fit: ‘don’t say I never give you anything’ .
GOP Senators call on National Science Foundation to investigate climate change grants
In age of Trump, evangelicals back self-styled top U.S. pimp: Reuters (well, of course, just look at their support for Roy Moore and their reaction to all of the women who accused Donald of sexual assaults, and the Access Hollywood tape. Might as well go all in and support a pimp.)
+++++++
1. Sold 100 GJT at $21.14-Elimination ($1 Commission at IB):
Profit Snapshot: $232.51
QUOTE: Synthetic Fixed-Income Securities Inc. STRATS Trust for Allstate Corp. Securities, Series 2006-3 (GJT)
LAST DISCUSSED: Item # 2 Sold 100 GJT at $20.74 (6/7/18 Post)
Security Description: Synthetic Floater
Last Sell: Item 1.A. Sold 51+ VOD at $30.21 (11/30/17 Post)
Maximum Position: 100 Shares
Purchase Restriction: Small Ball Rule
Dividend: The prospectus for the stock offering states that EQH intends to pay a quarterly dividend of $13. per share.
Historical Financial Information:
Insurance accounting is complicated and largely beyond my comprehension on several issues. This is how the company explained the change in Non-GAAP results between 2017 and 2016:
1. Sold 100 GJT at $21.14-Elimination ($1 Commission at IB):
Profit Snapshot: $232.51
QUOTE: Synthetic Fixed-Income Securities Inc. STRATS Trust for Allstate Corp. Securities, Series 2006-3 (GJT)
LAST DISCUSSED: Item # 2 Sold 100 GJT at $20.74 (6/7/18 Post)
Security Description: Synthetic Floater
Coupon: .85% above the 3 month treasury bill rate with an 8% maximum and monthly interest payments
Par Value: $25
Underlying Security: Allstate SU Bond Maturing on 4/1/36
Underlying Bond Prospectus: Make Whole Provision at page S-5
The Trust Certificate matures on the same date.
GJT Trading Profits to Date: $1,073.59 ($841.08 in prior trades/snapshots in Gateway Post for Trust Certificates)
A. Sold 50 WASH at $61.53-Used Commission Free Trade:
Profit Snapshot: +$2,309.26
This lot was part of a 100 share purchase made in 2010: Item # 3 Bought 100 WASH at $15.26 (1/14/2010 Post)
Rationale: Harvesting the profit is far more valuable to me than collecting the dividend.
Dividend: Quarterly at $.43 (annually)
When I bought this stock in 2010, the quarterly dividend was at $.21 per share. Dividends/Stock Splits The Washington Trust
Trading Profits WASH = +$2,656.29
3. Small Ball:
A. Added 5 VOD at $24.73-Used Commission Free Trade:
Average Cost Per Share = $26.04
VOD Stock Chart: Bear Trend Since January 2018
Highest Cost Lot: $26.57 (will be sold first using FIFO accounting)
Last Dividend Date: 6/7/18 at $1.22+ per share (semi-annual)
Pay Date: 8/3/18
Reinvestment: Yes
Last Substantive Discussion: Item 1.B. Bought 20 VOD at $26.57 (5/24/18 Post)
Purchase Restriction: Small Ball Rule
Maximum Position This Account: 100 Shares
B. Bought 10 EQH at $21.54 and 10 at $21.21-Used Commission Free Trade:
P/E on 2019 Estimate at $21.54 = 6.02
AXA S.A., based in France, recently brought this division public in an IPO sold to the public at $20 per share: Prospectus; AXA Equitable flops in largest IPO so far in 2018 - MarketWatch AXA S.A. still owns about 75% of AXA Equitable's stock. EQH did not receive any of the proceeds from the stock offering. EQH's assets under management stood at $670+B as of 12/31/17.
Axa Equitable is "one of America’s leading financial services companies". AXA
Generally speaking, a life insurance company will experience a net benefit when interest rates rise. New premiums and proceeds from maturing securities can be invested in higher yielding securities. The rise in rates may also have a beneficial impact on annuity profits. The downside is that capital gains realized from selling bonds and mortgage-backed securities will be harder to generate or result in less of profit compared to the past when rates were abnormally low.
Generally speaking, a life insurance company will experience a net benefit when interest rates rise. New premiums and proceeds from maturing securities can be invested in higher yielding securities. The rise in rates may also have a beneficial impact on annuity profits. The downside is that capital gains realized from selling bonds and mortgage-backed securities will be harder to generate or result in less of profit compared to the past when rates were abnormally low.
Maximum Position: 100 Shares
Purchase Restriction: Small Ball Rule
Dividend: The prospectus for the stock offering states that EQH intends to pay a quarterly dividend of $13. per share.
Historical Financial Information:
Insurance accounting is complicated and largely beyond my comprehension on several issues. This is how the company explained the change in Non-GAAP results between 2017 and 2016:
C. Eliminated OHI: Sold 26 at $31.44-Used Commission Free Trade:
Profit Snapshot: +$115.71
Rationale: The reasons for holding OHI in disfavor have been repeatedly discussed. My last discussion can be found here: Item # 1.C. Sold 31 OHI at $30.13 (6/7/18 Post)
Trading Profits: $1,503.51 ($1,387.8 in prior trades, snapshots in Stocks, Bonds & Politics: Gateway Post: Equity REIT Common and Preferred Stock Basket Strategy)
4. Short Term Bond/CD Ladder Basket Strategy:
A. Bought 2 Southeast Bank 1.8% CDs Maturing on 8/8/18 (2 month CDs):
B. Bought 1 Treasury .75% Coupon Maturing on 10/31/18:
YTM = 1.956%
I now own 3 bonds. I own nine treasuries maturing on 10/31/18. The other two have coupons of 1.25% (2) and 1.75% (3). This brokerage account currently pays .1% on funds held in a sweep account.
This is what the Schwab order book looked like for these three treasuries maturing on the same day when I place this order:
The current yield numbers are not relevant since there is only one coupon payment left, which will be made on the maturity date.
C. Bought 1 Treasury 1% Coupon Maturing on 9/15/18:
YTM = 1.937%
I now own 5.
D. Bought 2 Stifel BK 1.85% CDs (monthly interest payments) Maturing on 10/15/18 (4 month CDs):
E. Bought 1 Black Hills 2.5% SU Bond Maturing on 1/11/19:
FINRA Page: Bond Detail (prospectus not linked)
Prospectus
Issuer: Black Hills Corp. (BKH)
BKH Analyst Estimates
Black Hills Corp. Reports Solid First Quarter 2018 Results NYSE:BKH
2017 Annual Report
Credit Ratings:
Bought at a Total Cost of 99.997
YTM and Current Yield at 2.5%
I bought one more last week.
6. BPFHP: Issuer Redemption at $25 Par Value:
This 6.95% non-cumulative equity preferred stock was bought in December 2013 at a total cost of $22.18, near the end of the interest rate spike that year.
Prior Trades:
BPFHP Trading Profits = +$477.22
YTM = 1.956%
This is what the Schwab order book looked like for these three treasuries maturing on the same day when I place this order:
The current yield numbers are not relevant since there is only one coupon payment left, which will be made on the maturity date.
C. Bought 1 Treasury 1% Coupon Maturing on 9/15/18:
YTM = 1.937%
D. Bought 2 Stifel BK 1.85% CDs (monthly interest payments) Maturing on 10/15/18 (4 month CDs):
E. Bought 1 Black Hills 2.5% SU Bond Maturing on 1/11/19:
FINRA Page: Bond Detail (prospectus not linked)
Prospectus
Issuer: Black Hills Corp. (BKH)
BKH Analyst Estimates
Black Hills Corp. Reports Solid First Quarter 2018 Results NYSE:BKH
2017 Annual Report
Credit Ratings:
Bought at a Total Cost of 99.997
YTM and Current Yield at 2.5%
I bought one more last week.
6. BPFHP: Issuer Redemption at $25 Par Value:
 |
| 2018 BPFHP 50 Shares +$141.1 |
Prior Trades:
BPFHP Trading Profits = +$477.22
Disclaimer: I am not a financial advisor but simply an individual investor who has been managing my own money since I was a teenager. In this post, I am acting solely as a financial journalist focusing on my own investments. The information contained in this post is not intended to be a complete description or summary of all available data relevant to making an investment decision. Instead, I am merely expressing some of the reasons underlying the purchase or sell of securities. Nothing in this post is intended to constitute investment or legal advice or a recommendation to buy or to sell. All investors need to perform their own due diligence before making any financial decision which requires at a minimum reading original source material available at the SEC and elsewhere. A failure to perform due diligence only increases what I call "error creep". Stocks, Bonds & Politics: ERROR CREEP and the INVESTING PROCESS Each investor needs to assess a potential investment taking into account their personal risk tolerances, goals and situational risks. I can only make that kind of assessment for myself and family members.
