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Weak hiring in May had given rise to fears that the long-running expansion was foundering in the face of trade tensions and cooling growth overseas. But job growth rebounded sharply in June, the Labor Department reported Friday. Employers added 224,000 jobs, a larger figure than expected. And manufacturers, which are bearing the brunt of President Trump’s trade war, added jobs at the fastest pace since January.
…
Wage growth, which picked up late last year, appears to have stalled again — average hourly earnings were up 3.1 percent in June from a year earlier, a pace that has barely budged in months. The unemployment rate rose slightly, although at 3.7 percent it remains near a multidecade low.
But the Fed is still worried:
The Fed cited potential risks to financial stability, including several from overseas that it described as moderate but that it warned could spill into the United States. Those include a potential “no deal” British exit from the European Union, fiscal challenges in Italy, high debt levels in China and a possible escalation of the trade war.
“Growth indicators from around the world have disappointed, on net, raising concerns about the strength of the global economy,” the report said. “Meanwhile, contacts in business and agriculture have reported heightened concerns over trade developments.”
Leveraged loans, those extended to companies already saddled with heavy debts, remain a cause for some concern. “There are signs that credit standards for new leveraged loans are weak and have deteriorated further over the past six months,” the report said, adding that a slowdown in economic activity could “pose notable risks” to borrowers and creditors.
“Such developments could increase the downside risk to economic activity more generally,” the report said.
But, typically, good news was bad news:
The S&P 500 Index fell in thin post-holiday trading to pare a weekly advance to 1.7%. The measure slumped as much as 0.9% after the jobs data signaled a vibrant labor market, but ground higher in the afternoon. Banks led the recovery after the 10-year Treasury yield retook 2% and two-year rates hit 1.85%. The dollar surged versus major peers. Gold fell toward $1,400 an ounce.
The latest labor report delivered signs that the economy remains on track, countering some recent data that showed weakness in manufacturing. Stocks had rallied to records and bonds surged on market expectations that the central bank will lower interest rates by at least a quarter percentage point at its July meeting, though fed fund futures showed traders trimming the amount of easing they expect.
“The positive numbers for the labor markets have given investors a bit of a conundrum as continuing strength in employment should support earnings while at the same time they make a FOMC cut less likely,” said Chris Gaffney, president of world markets at TIAA Bank. “Very thin markets due to the holiday weekend have also contributed to some of the volatility.”
The Bank of Canada will diverge from the U.S. Federal Reserve’s expected policy-easing path and keep interest rates on hold at least through this year, according to economists in a Reuters poll who said that the risk of a recession has risen.
The Fed, the European Central Bank and other major central banks are set to embark on an easing policy in coming months, or already have, to combat sluggish inflation and slowing economic growth exacerbated by global trade tensions.
But the BoC will take a different route and keep its key interest rate on hold at 1.75 per cent through to the end of next year at least, according to the poll of nearly 40 economists taken on July 1-4, supported by recent upbeat domestic activity.
TXPR closed at 616.10, up 1.06% on the day. Volume was 1.93-million, roughly the median of the past thirty days.
CPD closed at 12.30, up 0.74% on the day. Volume of 53,171 was near the median of the past thirty days.
ZPR closed at 9.95, up 1.53% on the day. Volume of 224,664 was high, but not record-setting in the context of the past 30 days.
Five-year Canada yields were up 11bp to 1.53% today.
This report is being posted much later than normal and Monday’s might be even later, by which I mean ‘possibly Tuesday’. I’ve got a number of other things to attend to!
| 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 | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 1.5764 % | 1,970.5 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 1.5764 % | 3,615.7 |
| Floater | 6.04 % | 6.08 % | 39,756 | 13.81 | 4 | 1.5764 % | 2,083.8 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1473 % | 3,332.9 |
| SplitShare | 4.67 % | 4.68 % | 81,436 | 4.18 | 7 | 0.1473 % | 3,980.2 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1473 % | 3,105.5 |
| Perpetual-Premium | 5.57 % | -17.40 % | 63,884 | 0.09 | 7 | 0.3465 % | 2,974.3 |
| Perpetual-Discount | 5.45 % | 5.56 % | 61,703 | 14.48 | 25 | 0.1547 % | 3,105.3 |
| FixedReset Disc | 5.34 % | 5.22 % | 170,935 | 15.09 | 69 | 1.1629 % | 2,147.5 |
| Deemed-Retractible | 5.23 % | 5.90 % | 74,675 | 8.00 | 27 | 0.2884 % | 3,109.0 |
| FloatingReset | 4.02 % | 4.23 % | 45,041 | 2.48 | 4 | 1.0286 % | 2,378.8 |
| FixedReset Prem | 5.12 % | 3.67 % | 173,306 | 1.95 | 17 | 0.1113 % | 2,596.5 |
| FixedReset Bank Non | 1.98 % | 4.16 % | 116,878 | 2.49 | 3 | -0.2086 % | 2,649.8 |
| FixedReset Ins Non | 5.21 % | 7.33 % | 89,230 | 8.10 | 22 | 1.2082 % | 2,182.2 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| CU.PR.F | Perpetual-Discount | 1.01 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 21.01 Evaluated at bid price : 21.01 Bid-YTW : 5.42 % |
| HSE.PR.G | FixedReset Disc | 1.02 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 19.86 Evaluated at bid price : 19.86 Bid-YTW : 6.24 % |
| CM.PR.S | FixedReset Disc | 1.04 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 19.52 Evaluated at bid price : 19.52 Bid-YTW : 5.13 % |
| CM.PR.O | FixedReset Disc | 1.08 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 17.71 Evaluated at bid price : 17.71 Bid-YTW : 5.28 % |
| BMO.PR.Y | FixedReset Disc | 1.12 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 19.85 Evaluated at bid price : 19.85 Bid-YTW : 5.23 % |
| SLF.PR.H | FixedReset Ins Non | 1.12 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 16.19 Bid-YTW : 8.55 % |
| NA.PR.G | FixedReset Disc | 1.15 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 21.30 Evaluated at bid price : 21.58 Bid-YTW : 5.03 % |
| BIP.PR.E | FixedReset Disc | 1.16 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 21.59 Evaluated at bid price : 21.85 Bid-YTW : 5.75 % |
| NA.PR.E | FixedReset Disc | 1.22 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 20.26 Evaluated at bid price : 20.26 Bid-YTW : 5.08 % |
| GWO.PR.H | Deemed-Retractible | 1.22 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.37 Bid-YTW : 6.27 % |
| TD.PF.C | FixedReset Disc | 1.23 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 18.10 Evaluated at bid price : 18.10 Bid-YTW : 5.15 % |
| TD.PF.K | FixedReset Disc | 1.25 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 21.08 Evaluated at bid price : 21.08 Bid-YTW : 5.05 % |
| BAM.PR.R | FixedReset Disc | 1.26 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 15.25 Evaluated at bid price : 15.25 Bid-YTW : 6.00 % |
| BAM.PF.F | FixedReset Disc | 1.27 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 17.60 Evaluated at bid price : 17.60 Bid-YTW : 6.12 % |
| BMO.PR.W | FixedReset Disc | 1.27 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 17.55 Evaluated at bid price : 17.55 Bid-YTW : 5.25 % |
| BMO.PR.E | FixedReset Disc | 1.28 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 21.44 Evaluated at bid price : 21.44 Bid-YTW : 5.06 % |
| NA.PR.W | FixedReset Disc | 1.34 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 16.74 Evaluated at bid price : 16.74 Bid-YTW : 5.47 % |
| RY.PR.M | FixedReset Disc | 1.34 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 19.69 Evaluated at bid price : 19.69 Bid-YTW : 5.14 % |
| RY.PR.H | FixedReset Disc | 1.39 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 18.30 Evaluated at bid price : 18.30 Bid-YTW : 5.08 % |
| IFC.PR.A | FixedReset Ins Non | 1.39 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 15.36 Bid-YTW : 9.02 % |
| IAF.PR.I | FixedReset Ins Non | 1.47 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 20.76 Bid-YTW : 6.76 % |
| CM.PR.R | FixedReset Disc | 1.50 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 22.02 Evaluated at bid price : 22.38 Bid-YTW : 5.26 % |
| CM.PR.P | FixedReset Disc | 1.51 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 17.43 Evaluated at bid price : 17.43 Bid-YTW : 5.25 % |
| MFC.PR.R | FixedReset Ins Non | 1.54 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.33 Bid-YTW : 5.52 % |
| IAF.PR.G | FixedReset Ins Non | 1.55 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 20.36 Bid-YTW : 6.60 % |
| NA.PR.C | FixedReset Disc | 1.62 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 21.89 Evaluated at bid price : 22.23 Bid-YTW : 5.34 % |
| BAM.PR.B | Floater | 1.63 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 11.20 Evaluated at bid price : 11.20 Bid-YTW : 6.22 % |
| TD.PF.J | FixedReset Disc | 1.65 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 21.32 Evaluated at bid price : 21.62 Bid-YTW : 4.97 % |
| RY.PR.J | FixedReset Disc | 1.65 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 20.36 Evaluated at bid price : 20.36 Bid-YTW : 5.13 % |
| BMO.PR.C | FixedReset Disc | 1.67 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 22.57 Evaluated at bid price : 23.20 Bid-YTW : 5.09 % |
| BMO.PR.S | FixedReset Disc | 1.67 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 18.87 Evaluated at bid price : 18.87 Bid-YTW : 5.06 % |
| MFC.PR.K | FixedReset Ins Non | 1.78 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 18.92 Bid-YTW : 7.42 % |
| IFC.PR.C | FixedReset Ins Non | 1.78 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 18.25 Bid-YTW : 7.70 % |
| TD.PF.D | FixedReset Disc | 1.81 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 20.82 Evaluated at bid price : 20.82 Bid-YTW : 5.09 % |
| CM.PR.Q | FixedReset Disc | 1.82 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 19.62 Evaluated at bid price : 19.62 Bid-YTW : 5.31 % |
| RY.PR.Z | FixedReset Disc | 1.84 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 18.28 Evaluated at bid price : 18.28 Bid-YTW : 5.05 % |
| TD.PF.B | FixedReset Disc | 1.84 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 18.26 Evaluated at bid price : 18.26 Bid-YTW : 5.13 % |
| HSE.PR.E | FixedReset Disc | 1.89 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 19.98 Evaluated at bid price : 19.98 Bid-YTW : 6.25 % |
| TRP.PR.C | FixedReset Disc | 1.94 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 12.60 Evaluated at bid price : 12.60 Bid-YTW : 5.75 % |
| TD.PF.A | FixedReset Disc | 1.96 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 18.25 Evaluated at bid price : 18.25 Bid-YTW : 5.10 % |
| BAM.PR.T | FixedReset Disc | 2.00 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 15.32 Evaluated at bid price : 15.32 Bid-YTW : 6.05 % |
| BAM.PF.A | FixedReset Disc | 2.08 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 19.60 Evaluated at bid price : 19.60 Bid-YTW : 5.78 % |
| MFC.PR.L | FixedReset Ins Non | 2.13 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 17.30 Bid-YTW : 8.00 % |
| SLF.PR.J | FloatingReset | 2.24 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 13.70 Bid-YTW : 10.18 % |
| MFC.PR.N | FixedReset Ins Non | 2.25 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 17.26 Bid-YTW : 8.21 % |
| BAM.PF.B | FixedReset Disc | 2.27 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 18.00 Evaluated at bid price : 18.00 Bid-YTW : 5.82 % |
| NA.PR.S | FixedReset Disc | 2.28 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 18.18 Evaluated at bid price : 18.18 Bid-YTW : 5.31 % |
| BAM.PR.Z | FixedReset Disc | 2.31 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 19.06 Evaluated at bid price : 19.06 Bid-YTW : 5.87 % |
| TD.PF.I | FixedReset Disc | 2.36 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 22.15 Evaluated at bid price : 22.60 Bid-YTW : 4.96 % |
| MFC.PR.M | FixedReset Ins Non | 2.46 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 17.46 Bid-YTW : 8.14 % |
| BAM.PF.G | FixedReset Disc | 2.47 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 17.82 Evaluated at bid price : 17.82 Bid-YTW : 6.03 % |
| TD.PF.E | FixedReset Disc | 2.64 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 20.99 Evaluated at bid price : 20.99 Bid-YTW : 5.13 % |
| TRP.PR.G | FixedReset Disc | 2.67 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 18.84 Evaluated at bid price : 18.84 Bid-YTW : 5.81 % |
| TRP.PR.F | FloatingReset | 2.68 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 14.16 Evaluated at bid price : 14.16 Bid-YTW : 6.38 % |
| BAM.PR.X | FixedReset Disc | 2.71 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 13.25 Evaluated at bid price : 13.25 Bid-YTW : 5.94 % |
| PWF.PR.T | FixedReset Disc | 2.78 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 18.86 Evaluated at bid price : 18.86 Bid-YTW : 5.26 % |
| PWF.PR.P | FixedReset Disc | 2.81 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 13.55 Evaluated at bid price : 13.55 Bid-YTW : 5.53 % |
| MFC.PR.F | FixedReset Ins Non | 2.84 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 13.75 Bid-YTW : 9.57 % |
| TRP.PR.B | FixedReset Disc | 3.02 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 11.95 Evaluated at bid price : 11.95 Bid-YTW : 5.61 % |
| SLF.PR.G | FixedReset Ins Non | 3.12 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 14.23 Bid-YTW : 9.28 % |
| BAM.PR.C | Floater | 4.09 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 11.46 Evaluated at bid price : 11.46 Bid-YTW : 6.08 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| TD.PF.H | FixedReset Prem | 86,417 | YTW SCENARIO Maturity Type : Call Maturity Date : 2021-10-31 Maturity Price : 25.00 Evaluated at bid price : 25.71 Bid-YTW : 3.97 % |
| MFC.PR.O | FixedReset Ins Non | 56,551 | YTW SCENARIO Maturity Type : Call Maturity Date : 2021-06-19 Maturity Price : 25.00 Evaluated at bid price : 26.01 Bid-YTW : 3.60 % |
| BAM.PR.K | Floater | 49,946 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 10.95 Evaluated at bid price : 10.95 Bid-YTW : 6.37 % |
| TD.PF.M | FixedReset Disc | 45,230 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 23.08 Evaluated at bid price : 24.77 Bid-YTW : 5.01 % |
| TRP.PR.K | FixedReset Disc | 43,458 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 23.38 Evaluated at bid price : 24.94 Bid-YTW : 5.19 % |
| CM.PR.Y | FixedReset Disc | 40,780 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-07-05 Maturity Price : 23.11 Evaluated at bid price : 24.85 Bid-YTW : 5.06 % |
| There were 37 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| BAM.PR.K | Floater | Quote: 10.95 – 11.48 Spot Rate : 0.5300 Average : 0.3632 YTW SCENARIO |
| RY.PR.M | FixedReset Disc | Quote: 19.69 – 20.18 Spot Rate : 0.4900 Average : 0.3247 YTW SCENARIO |
| TRP.PR.E | FixedReset Disc | Quote: 16.05 – 16.50 Spot Rate : 0.4500 Average : 0.2996 YTW SCENARIO |
| IFC.PR.G | FixedReset Ins Non | Quote: 20.40 – 20.78 Spot Rate : 0.3800 Average : 0.2498 YTW SCENARIO |
| TD.PF.C | FixedReset Disc | Quote: 18.10 – 18.44 Spot Rate : 0.3400 Average : 0.2113 YTW SCENARIO |
| BMO.PR.W | FixedReset Disc | Quote: 17.55 – 17.96 Spot Rate : 0.4100 Average : 0.2866 YTW SCENARIO |
and bond holders continue to accept returns lower than inflation. phenomenal how governments have convinced people that’s ok.
I’ve been wondering what picture James would pick for Friday’s market report. Not just one, but two unicorns… and a rainbow! Given how much prefs have fallen, at some point, there could well be a 2% up day and then I want to see what that picture is going to be.
Looks like the 1000-piece jigsaw puzzle my daughter was working on recently!