May 13, 2016

Assiduous Readers will remember my interest in the minimum wage debate and my position that an increase in the minimum wage is desirable, not because of any bleating about fairness, but because this will help to increase productivity as lower-skill jobs are automated. This automation is well-illustrated by McDonalds self-ordering kiosks in Europe; the issue was further discussed on August 6, 2015. We now have another data point – the hamburger chain Wendy’s is bringing in more self-ordering kiosks to reduce labour costs:

Wendy’s (WEN) said that self-service ordering kiosks will be made available across its 6,000-plus restaurants in the second half of the year as minimum wage hikes and a tight labor market push up wages.

It will be up to franchisees whether to deploy the labor-saving technology, but Wendy’s President Todd Penegor did note that some franchise locations have been raising prices to offset wage hikes.

McDonald’s (MCD) has been testing self-service kiosks. But Wendy’s, which has been vocal about embracing labor-saving technology, is launching the biggest potential expansion.

Wendy’s Penegor said company-operated stores, only about 10% of the total, are seeing wage inflation of 5% to 6%, driven both by the minimum wage and some by the need to offer a competitive wage “to access good labor.”

In addition to self-order kiosks, the company is also getting ready to move beyond the testing phase with labor-saving mobile ordering and mobile payment available systemwide by the end of the year. Yum Brands and McDonald’s already have mobile ordering apps.

… and Assiduous Reader SM draws my attention to drone racing:

With the drone industry charged, Mountain Dew® and DR1 Racing, announced a global partnership full of industry firsts. Featuring the top drone racing pilots in the world, this newly formed drone racing series marks the first branded partnership and national broadcast for this burgeoning sport. Headlining the series, the DR1 Invitational presented by Mountain Dew will air this August in a one-hour broadcast special. DR1 will also be the first truly live drone series to stream globally on Twitch, the world’s leading social video platform and community for gamers.

The DR1 Invitational presented by Mountain Dew will showcase 12 of the top drone racing pilots in the world as they compete for the title at the iconic Sepulveda Dam in Los Angeles this summer. Pilots, who control drones from the top of the dam, will face down a gauntlet of environmental and man-made obstacles as they fly their drones at speeds of more than 80 MPH while spectators watch on from above.

Sounds great, but best of all would be a demolition derby! Have a field – say the size of a football field – with a large hoop at each end. Go through the hoops alternately. Most hoop passages in twenty minutes wins. I’d buy tickets for that!

HIMIPref™ Preferred Indices
These values reflect the December 2008 revision of the HIMIPref™ Indices

Values are provisional and are finalized monthly
Index Mean
Current
Yield
(at bid)
Median
YTW
Median
Average
Trading
Value
Median
Mod Dur
(YTW)
Issues Day’s Perf. Index Value
Ratchet 4.69 % 5.70 % 11,720 17.03 1 0.0000 % 1,682.0
FixedFloater 6.62 % 5.74 % 18,930 16.80 1 -0.4854 % 3,052.8
Floater 4.51 % 4.73 % 43,819 15.94 4 0.0717 % 1,720.1
OpRet 0.00 % 0.00 % 0 0.00 0 -0.0589 % 2,814.1
SplitShare 4.94 % 5.47 % 80,008 3.96 7 -0.0589 % 3,293.0
Interest-Bearing 0.00 % 0.00 % 0 0.00 0 -0.0589 % 2,569.3
Perpetual-Premium 5.77 % -10.28 % 79,408 0.08 6 -0.0066 % 2,595.0
Perpetual-Discount 5.49 % 5.58 % 102,536 14.51 33 0.1860 % 2,671.1
FixedReset 5.19 % 4.70 % 168,453 7.42 88 -0.1390 % 1,968.7
Deemed-Retractible 5.16 % 5.66 % 129,257 6.77 33 -0.0013 % 2,659.6
FloatingReset 3.16 % 5.19 % 23,705 5.29 17 0.1802 % 2,079.5
Performance Highlights
Issue Index Change Notes
HSE.PR.G FixedReset -3.10 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 18.75
Evaluated at bid price : 18.75
Bid-YTW : 5.83 %
NA.PR.Q FixedReset -1.57 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 23.13
Bid-YTW : 4.83 %
HSE.PR.C FixedReset -1.50 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 17.10
Evaluated at bid price : 17.10
Bid-YTW : 5.90 %
TD.PR.T FloatingReset -1.48 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 21.28
Bid-YTW : 5.19 %
FTS.PR.H FixedReset -1.44 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 13.02
Evaluated at bid price : 13.02
Bid-YTW : 4.34 %
MFC.PR.C Deemed-Retractible -1.36 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 21.01
Bid-YTW : 7.13 %
MFC.PR.K FixedReset -1.34 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 18.45
Bid-YTW : 7.44 %
TD.PR.S FixedReset -1.31 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 22.56
Bid-YTW : 4.75 %
HSE.PR.E FixedReset -1.30 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 19.00
Evaluated at bid price : 19.00
Bid-YTW : 5.77 %
TRP.PR.G FixedReset -1.28 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 19.35
Evaluated at bid price : 19.35
Bid-YTW : 4.86 %
MFC.PR.L FixedReset -1.26 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 18.76
Bid-YTW : 7.32 %
MFC.PR.H FixedReset -1.25 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 21.25
Bid-YTW : 6.29 %
MFC.PR.I FixedReset -1.12 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 20.37
Bid-YTW : 6.66 %
MFC.PR.M FixedReset -1.03 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 19.20
Bid-YTW : 7.20 %
TRP.PR.C FixedReset 1.10 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 12.00
Evaluated at bid price : 12.00
Bid-YTW : 4.70 %
CU.PR.F Perpetual-Discount 1.11 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 20.92
Evaluated at bid price : 20.92
Bid-YTW : 5.39 %
TRP.PR.B FixedReset 1.14 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 11.50
Evaluated at bid price : 11.50
Bid-YTW : 4.42 %
BAM.PR.X FixedReset 1.18 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 13.71
Evaluated at bid price : 13.71
Bid-YTW : 4.85 %
TD.PF.F Perpetual-Discount 1.45 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 24.12
Evaluated at bid price : 24.50
Bid-YTW : 5.02 %
PWF.PR.Q FloatingReset 2.36 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 12.57
Evaluated at bid price : 12.57
Bid-YTW : 4.25 %
TRP.PR.A FixedReset 3.33 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 14.59
Evaluated at bid price : 14.59
Bid-YTW : 4.76 %
SLF.PR.J FloatingReset 4.22 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 12.85
Bid-YTW : 10.69 %
BIP.PR.A FixedReset 8.81 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 19.40
Evaluated at bid price : 19.40
Bid-YTW : 5.64 %
Volume Highlights
Issue Index Shares
Traded
Notes
FTS.PR.H FixedReset 233,200 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 13.02
Evaluated at bid price : 13.02
Bid-YTW : 4.34 %
TRP.PR.J FixedReset 60,016 YTW SCENARIO
Maturity Type : Call
Maturity Date : 2021-05-31
Maturity Price : 25.00
Evaluated at bid price : 25.75
Bid-YTW : 4.80 %
NA.PR.X FixedReset 55,941 YTW SCENARIO
Maturity Type : Call
Maturity Date : 2021-05-15
Maturity Price : 25.00
Evaluated at bid price : 26.22
Bid-YTW : 4.52 %
TRP.PR.C FixedReset 54,200 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 12.00
Evaluated at bid price : 12.00
Bid-YTW : 4.70 %
RY.PR.Q FixedReset 52,106 YTW SCENARIO
Maturity Type : Call
Maturity Date : 2021-05-24
Maturity Price : 25.00
Evaluated at bid price : 26.13
Bid-YTW : 4.47 %
TD.PF.F Perpetual-Discount 32,220 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 24.12
Evaluated at bid price : 24.50
Bid-YTW : 5.02 %
There were 24 other index-included issues trading in excess of 10,000 shares.
Wide Spread Highlights
Issue Index Quote Data and Yield Notes
POW.PR.B Perpetual-Discount Quote: 23.82 – 24.28
Spot Rate : 0.4600
Average : 0.3133

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 23.55
Evaluated at bid price : 23.82
Bid-YTW : 5.67 %

IAG.PR.A Deemed-Retractible Quote: 21.68 – 22.20
Spot Rate : 0.5200
Average : 0.3885

YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 21.68
Bid-YTW : 6.76 %

RY.PR.J FixedReset Quote: 19.39 – 19.99
Spot Rate : 0.6000
Average : 0.4712

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 19.39
Evaluated at bid price : 19.39
Bid-YTW : 4.48 %

BNS.PR.F FloatingReset Quote: 18.51 – 19.55
Spot Rate : 1.0400
Average : 0.9120

YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 18.51
Bid-YTW : 7.57 %

PWF.PR.L Perpetual-Discount Quote: 22.90 – 23.23
Spot Rate : 0.3300
Average : 0.2070

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-05-13
Maturity Price : 22.66
Evaluated at bid price : 22.90
Bid-YTW : 5.61 %

MFC.PR.I FixedReset Quote: 20.37 – 20.73
Spot Rate : 0.3600
Average : 0.2443

YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 20.37
Bid-YTW : 6.66 %

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