Canadian Life Companies Split Corp T.LFE

Soft US CPI# is good news... short term

[flamingogold]

Good news for a rebound as the US CPI# comes in cooler than expected. So, markets will rock higher.... this morning. Enter Powell for the afternoon. There is zero chance of a rate cut so the market will be listening for dovish talk that will increase the odds for a cut by September instead of post election.

LFE, which is currently below the threshold, is in a tough spot. A good CPI# and dovish FED will be great for overall markets and LFE will benefit but only short term. If a falling CPI# and falling rate trend continues eventually LFE will fall also.

If LFE can't even make the payment threshold at 5% market rates, it will be even harder if rates are 4% a year from now.

[mouserman]

4% is going to be like 500% easier than 0%  prepandemic... LFE has big payout to preferreds , which will get reduced IF interest rates come down. I doubt we ever see below 4% again... Most of my life it was above that level..

[flamingogold]

We will never get back to zero FED fund rates, and we don't want to because something has to break again and then everything goes into the wood chipper. I believe this cutting cycle will stop somewhere between 3% to 4% over the next 2 years. For the passive investor looking for steady monthly income, there are better options out there than LFE.

[mouserman]

Lifecos backing up again and markets seem to be looking ahead to lower interest rates .. and belief that lifecos will suffer. I  have been stopped out on LFE and no longer have shares. BUT  very likely could reenter again lower for the ride back up.  Certainly higher for longer was the operative word of late, but a year ago rate cuts in the US  were  a certainty and pushed