Category: Market Action

The New York Fed has released the May Survey of Consumer Expectations:

May Survey: Household Finance and Labor Market Expectations Deteriorate; Inflation Expectations Down at Short-Term Horizon

• Median inflation expectations decreased by 0.1 percentage point (ppt) to 3.5 percent at the one-year-ahead horizon and were unchanged at 3.1 percent and 3.0 percent at the three-year and five-year-ahead horizons in May.
• Expectations for future credit availability deteriorated, with a lower share of respondents expecting it will be easier to obtain credit in the year ahead. Perceptions of credit access compared to a year ago remained largely unchanged.
• The mean perceived probability of finding a job if one’s current job was lost decreased by 2.3 ppts to 43.7 percent, remaining below its 12-month trailing average of 46.8 percent and marking the lowest reading since December 2025.
• The mean perceived probability of losing one’s job in the next twelve months increased by 0.5 ppt to 15.1 percent, above the series’ 12-month trailing average of 14.4 percent.

How about that Maple market, eh?

Less than one month after Alphabet Inc. GOOGL-Q -1.42%decrease
broke the record for largest Canadian dollar-denominated corporate bond offering in history, Google’s parent company has already been bested by e-commerce giant Amazon.com Inc AMZN-Q -0.33%decrease
.

Amazon is selling $14-billion worth of maple bonds, the term for loonie-denominated bonds issued by foreign companies, broken into five pieces with maturities ranging from three to 30 years.

The issuance is nearly two-thirds larger than the $8.5-billion, four-part offering sold by Alphabet in mid-May and nearly double the $7.15-billion bond deal raised by Coastal GasLink in 2024, which remains the largest corporate bond ever issued by a Canadian company.
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The Alphabet deal pushed the total amount of maple bonds issued in 2026 to $19.8-billion, according to Royal Bank of Canada data, setting a new annual record that surpassed the deal-making frenzy of 2021, when the maple market hit $19.2-billion. Not including any other maple deals that have been announced since May 7, the Amazon offering pushes the 2026 total to at least $33.8-billion.

This means the current maple market is already worth nearly one-third of last year’s domestic corporate bond market, and the year isn’t halfway over. Canadian businesses issued a total of approximately $100-billion worth of corporate bonds in 2025, which was the highest amount of corporate debt issuance the country had seen in more than a decade.
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The 30-year portion of the Amazon offering is the largest, totalling $4.75-billion. Other pieces include a $3.5-billion 10-year bond, a $2.5-billion five-year bond, a $2-billion seven-year bond and a $1.25-billion three-year bond.

The yield on the 30-year part is also the highest, expected to be 1.1 per cent above government bond yields. The other pieces are expected to yield between 0.4 per cent and 0.8 per cent above government yields.

Jobs, jobs, jobs!

The US labor market appears to have found its footing: The economy added 172,000 jobs in May, shattering expectations, new data from the Bureau of Labor Statistics showed Friday.

The latest jobs report provided some reassurance that the US labor market may be stabilizing after a year of weak and stilted job growth: Unemployment held steady at 4.3%, while employment gains topped 100,000 for the third consecutive month, a pattern not seen since early 2024.

Job growth was also far stronger than initially thought in recent months. March’s payroll gains were revised up by 29,000 to 214,000, while April’s tally was revised higher by 64,000 to 179,000 jobs added.
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Annual wage growth slowed to 3.4% in May from 3.6% the month before. Based on the latest projections for the May Consumer Price Index, which is due out next week, pay gains could be running nearly 1 percentage point below inflation.
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Leisure and hospitality added an estimated 70,000 jobs in May, more than double the gains in April for the industry; the government sector added 52,000 jobs (with local government roles that exclude education accounting for 43,500 of those); and healthcare and social assistance added 47,200 jobs.

And in the Frozen North:

Canada’s economy added 87,800 jobs and the unemployment rate fell to 6.6% in May, data showed on Friday, defying widespread expectations of only modest employment growth and showing some resilience despite signs of softer economic growth.

The May data marked the first job growth of 2026 and helped wipe out almost 80 per cent of all job losses posted since the start of the year.
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Statscan said the construction sector added a net 26,800 jobs, the information, culture and recreation sector saw a gain of 19,300 jobs, transportation and warehousing employment grew by 18,700 jobs and accommodation and food services gained 17,000 jobs.

The wholesale and retail trade sector, which accounts for almost 14 per cent of the total employed workforce, posted a decline of 35,000 positions.
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The job growth last month was concentrated entirely in full-time jobs, which saw a net addition of 154,000 in May, reversing almost all of the first four months of net job losses in that category, StatsCan said. Part-time employment fell by 66,200 positions.

Average hourly wages of permanent employees, a metric closely tracked by the Bank of Canada to gauge inflation expectations, grew 3.2 per cent in May, a sharp decline from 4.8 per cent in April.

.The markets say; the markets judged:

Wall Street’s nine-week winning streak ended with a thud on Friday, as red-hot technology stocks suffered their largest daily decline since April 2025 after a hot May jobs report fueled fears of a hawkish policy pivot from the U.S. Federal Reserve.

Selling was concentrated among chip stocks and other technology favorites that have surged ⁠higher in ​recent weeks as the Nasdaq Composite Index and S&P 500 rose repeatedly to fresh highs.
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Financial markets are pricing in a ​42.7% likelihood of a rate hike at the conclusion of the Fed’s December meeting, according to CME’s FedWatch tool.

U.S. Treasury ‌yields surged ​following the report, with the yield on ‌the 2-year note, which typically moves in step with Fed rate expectations, hitting a 15-month high. It ​was at 4.147% by late afternoon.

Canadian bond yields were also up sharply for the session. Canada’s employment report showed the economy adding 87,800 jobs last month, wiping out ⁠much of the declines posted since the start of the year.

Investors are now pricing in roughly 40 basis points of interest rate hikes by the Bank of Canada through the end of the year, up from ⁠34 basis points before the data. Economists aren’t so convinced: a Reuters poll released Friday showed they expect no change in rates this year, including at a policy decision next Wednesday.
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The Dow Jones Industrial Average fell 695.15 points, or 1.35%, to 50,866.78, the S&P 500 shed 200.57 points, or 2.64%, to 7,383.74 and the Nasdaq Composite lost 1,121.53 points, or 4.18%, to 25,709.43.

The Toronto Stock Exchange’s S&P/TSX composite index ended down 803.61 points at 34,413.45, pulling back from a ‌record closing high on Thursday and marking its biggest decline since February 12. For the week, the index was down 1%.

PerpetualDiscounts now yield 5.68%, equivalent to 7.38% interest at the standard conversion factor of 1.3x. Long corporates yielded 4.86% on 2026-05-27. Therefore the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”) has widened slightly (and perhaps spuriously) to 250bp from the 245bp reported May 27.

The TXPR Price Index set a new 52-week high today of 710.92, beyond the previous mark of 710.65 set yesterday.

Inflation in the US picked up:

High gas prices pushed up inflation again last month while adding to Americans’ financial strain: Households are saving at the lowest rate in nearly four years, a new report showed Thursday.

The Iran war’s oil price shock lifted the Federal Reserve’s preferred inflation gauge to 3.8% in April from 3.5% the month before, according to Commerce Department data.

The Personal Consumption Expenditures price index rose 0.4% on a monthly basis, slowing from a 0.7% increase in March.

Consumer spending, which powers about two-thirds of the economy, rose 0.5% in April – a seemingly resilient but slower pace than the 1% jump in March.
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Consumers’ incomes were flat for the month; disposable (after-tax) income fell by 0.1%; and inflation-adjusted disposable income dropped by 0.5%.

Americans continued to tap their piggy banks: Their personal saving rate (saving as a percentage of after-tax income) dropped to 2.6% in April, marking the lowest rate since June 2022, when inflation hit a four-decade high. At the start of the year, the savings rate was 4.3%.
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The core PCE price index rose at a slower-than-expected rate of 0.2% for the month, but the annual rate moved higher to 3.3%.

The Boston Fed published a working paper by Justin Katz and Paul S. Willen titled The Effect of Land Supply for New Homes on Residential Investment and House Prices:

In recent years, the United States has experienced house price growth outpacing income growth, low supply of new housing units, and flat to negative growth in construction productivity. A large body of research argues that land-use regulations play a central role in explaining these patterns by constraining housing supply. This paper explores a hypothesis that complements the regulatory explanation: In many high-cost markets, large plots of buildable land are scarce, constraining the amount and efficiency of residential construction. Despite its importance for evaluating housing policy, little comprehensive research has studied this alternative explanation. This is partly because there is limited detailed historical parcel-level data on land available for residential development. The paper addresses this data challenge by using a parcel-level data set to measure the buildable-land distribution in New England and track its development from 2007 to 2021.

That suggests an overall strategy for the big corporations gobbling up residential properties for rental purposes … try to shade your purchases so you can combine them to make larger parcels. Could be valuable!

Quadravest has announced:

Canadian Banc Corp. (the “Company”) is pleased to announce
it will undertake an offering of Preferred Shares (TSX: BK.PR.A) of the Company. The offering will be led by National Bank Financial Inc.

The sales period of this overnight offering will end at 8:30 a.m. EST on May 28, 2026. The offering is expected to close on or about June 4, 2026 and is subject to certain closing conditions including approval by the TSX.

The Preferred Shares will be offered at a price of $10.33 per Preferred Share. The closing price on the TSX of the Preferred Shares on May 26, 2026 was $10.38.

Since the inception of the Company, 250 consecutive dividends have been declared for the Preferred Shares. The aggregate dividends declared on the Preferred Shares total $11.78 per share. All distributions to date have been made in tax advantaged eligible Canadian dividends.

Effective October 9, 2025, the DBRS rating on the Preferred Shares is Pfd-3 (low).

The net proceeds of the offering will be used by the Company to invest in a portfolio consisting primarily of six publicly traded Canadian Banks as follows:

Bank of Montreal	Canadian Imperial Bank of Commerce	Royal Bank of Canada
The Bank of Nova Scotia	National Bank of Canada	The Toronto-Dominion Bank

The Company’s Preferred Share investment objectives are to:
i. provide holders with cumulative preferential floating rate monthly cash dividends at a rate per annum equal to the prevailing Canadian prime rate plus 1.50% (minimum annual rate of 5.0% and maximum annual rate of 8.0%) based on original $10 issue price; and
ii. on or about the termination date, currently December 1, 2028 (subject to further 5 year extensions and it has been extended in the past) to pay holders the original $10 issue price of those shares.

This follows their May 12 announcement of a 110-new-for-100-old split of the Capital Units:

Canadian Banc Corp. (the “Company”) is pleased to announce its intention to complete a share split of its Class A shares (the “Share Split”) due to the Company’s strong performance. The Class A shareholders of record at the close of business on May 19, 2026 will receive 10 additional Class A shares for every 100 Class A shares held, pursuant to the Share Split. The Share Split is subject to approval by the Toronto Stock Exchange (the “TSX”).

Class A shareholders will continue to receive monthly cash distributions targeted to be at the rate of 15% annualized based on the volume weighted average market price of the Class A shares for the last 3 trading days of the preceding month following the Share Split. Since inception, Class A shareholders have received cash distributions of $25.65 per share.

The Class A shares are expected to commence trading on an ex-split basis at the opening of trading on May 19, 2026. No fractional Class A shares will be issued, and the number of Class A shares each holder shall receive will be rounded down to the nearest whole number. The Share Split is a nontaxable event.

The impact of the Share Split will be reflected in the net asset value per unit as at May 29, 2026.

The Company invests in a portfolio primarily consisting of six publicly traded Canadian Banks as follows: Bank of Montreal, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada, Bank of Nova Scotia, Toronto-Dominion Bank. Shares held within the portfolio are expected to range between 5-20% in weight but may vary at any time. To generate additional returns above the dividend income earned on the portfolio, the Company engages in a selective covered call writing program.

This news release constitutes a “designated news release” for the purposes of the Company’s prospectus supplement dated June 19, 2025, to its short form base shelf prospectus dated June 18, 2025.

The TXPR Price Index hit a new 52-week high today of 710.65, eclipsing the old mark of 709.86 set May 25.

PerpetualDiscounts now yield 5.69%, equivalent to 7.40% interest at the standard conversion factor of 1.3x. Long corporates yielded 4.93% on 2026-05-27. Therefore the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”) has widened dramatically to 245bp from the 220bp reported May 20.