Stocks bounced around during the day before closing with a loss of 53 points at 22,359 on light trading volume. Markets appear to be digesting the effects of a possible December rate hike. Banks were higher on the day in anticipation of higher rates.
A recent update from the bond gurus at BTS in Lexington, MA said that for now the bond markets appear solid and that any pullback in high yield junk bonds offer opportunities to buy and capture yield for the reams of cash sitting on the sidelines. New issues of corporate bonds in general are four to five times oversubscribed and the money that does not get the bid continues to sit in cash. BTS did indicate that bond markets might experience a selloff should rates on the 10 year US Treasury rise to the 2.6% level so we are watching that. Currently the 10 year is at 2.28% but over the past couple of weeks has ceased its downtrend and is creeping higher. Mortgage rates also rose for the first time in 7 weeks and now average about 3.9% up from 3.75%.
Over the past week, shares of telecom companies rose from the swamp of underperformance after Sprint and T-Mobile renewed their long shelved merger talks. It appears the deal will favor Deutsche Telekom which owns T-Mobile at the expense of Sprint’s main honey badger which is Japan’s Softbank. The gurus think that any deal will be good for both AT&T and Verizon which have been in a price war with both Sprint and T-Mobile since the tie up might restrict the T-Mobile/Sprint company from lowering prices. I wonder if the new combined company will be called “Scheiße-T-Mobile”. That Sprint spokesman who used to work for Verizon might now find himself taking German lessons.
Grandma say hello to Alexa! Amazon is coming out with a new version of the Echo for senior citizens. It is called “Echo Silver”. Check out the video here. This will allow Amazon to tap into a fast growing US demographic group. Jeff Bezos is genius!