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Well, that was a month to forget, with the 4.8% downturn for the S&P 500
SPX,
the worst September in a decade.
It’s been a difficult decade, not just month, for income investors, with interest rates so low. Now, income investors confront not just low rates but high inflation. So it isn’t easy to find places to invest for income streams rather than shooting for the moon.
Adam Kramer, a portfolio manager at Fidelity, says floating-rate preferred stocks and loans are less likely than fixed-income investments to lose value in a higher inflationary and interest-rate environment. In an article on the fund manager’s website, he said master limited partnerships, typically oil and gas pipelines, pay some of the highest yields, and according to Kramer are mispriced by the market. Similarly, clean energy yieldcos tend to operate solar and wind power projects.
Kramer also notes real-estate investment trusts — and mentions casino and shopping mall REITs as having COVID concerns reflected in their prices. Lastly, he mentioned dividend-paying value stocks, like oil producers and gold miners.
While Kramer didn’t mention individual investments, a review of the Fidelity Advisor Multi Asset Income Fund where he’s lead manager shows holdings through the end of September. The fund’s top stock market investments included metals streaming company Wheaton Precious Metals
WPM,
gold miner Newmont
NEM,
and crude-oil tanker company DHT Holdings
DHT,
Preferred stockholdings include thermal-energy provider Babcock & Wilcox, Volkswagen investor Porsche Automobil Holding, investment banking firm B Riley Financial and commercial real estate firm Brookfield Property Partners.
The fund invests in wood-fiber-processing master limited partnership Enviva Partners
EVA,
as well as Smart
SRU.UT,
the Canadian shopping center REIT.
The chart
People don’t really talk about the New York Stock Exchange
NYA,
index — an index of all the companies listed on the Big Board — but Bank of America presents an interesting annotated chart of it. Right now, it says we’re in the “summer consolidation” phase.
The buzz
Politics continued to take center stage, as House Speaker Nancy Pelosi delayed an infrastructure vote while West Virginia Sen. Joe Manchin called for the social-spending plan’s size to be cut to $1.5 trillion from $3.5 trillion. The debt-ceiling issue still looms as well.
It’s a big day on the economics front, with the Federal Reserve’s preferred inflation measure, the PCE price index, due for release, alongside consumer spending and personal income at 8:30 a.m. Eastern. The closely followed Institute for Supply Management’s manufacturing index is due at 10 a.m., as are construction spending data, as automobile makers release their monthly sales throughout the day.
Merck
MRK,
and Ridgeback Biotherapeutics said their oral antiviral reduced the risk of hospitalization or death from COVID-19 in a Phase 3 trial. Merck said it plans to submit an application for emergency-use authorization to the Food and Drug Administration as soon as possible.
Zoom Video Communications
ZM,
and Five9
FIVN,
called off their multibillion-dollar merger Thursday, after Five9 shareholders voted against a deal that was being investigated by the U.S. Department of Justice. Five9 separately announced an analyst day for November to discuss the company’s strategy and outlook.
The market
Futures on both the S&P 500
ES00,
and Nasdaq-100
NQ00,
were coming off session lows as the open approached. The yield on the 10-year Treasury
TMUBMUSD10Y,
slipped to 1.49%.
Random reads
“Seinfeld” reruns have landed on Netflix
NFLX,
but Jerry Seinfeld says a reboot of the show would be sad.
The pop singer Shakira says she fought off a pair of wild boars.
Talk about a mixed bag — a man died before cashing the winning lottery ticket he was carrying in his wallet.
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