Category: Market Action

PerpetualDiscounts now yield 5.63%, equivalent to 7.32% interest at the standard conversion factor of 1.3x. Long corporates yielded 4.74% on 2025-11-26, so the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”) has widened sharply to 260bp from the 240bp reported November 12.

TXPR closed at 683.28, up 0.81% on the day. Volume today was 1.47-million, well above the median of the past 21 trading days.

CPD closed at 13.54, up 0.82% on the day. Volume was 48,090, well above the median of the past 21 trading days.

ZPR closed at 12.00, up 0.76% on the day. Volume was 109,310, below the median of the past 21 trading days.

Five-year Canada yields were down a bit to 2.75%.

TXPR’s fine performance was probably due to reinvestment of the RY.PR.M redemption money, although I’m sure the big bounce in equity prices today helped!

U.S. and Canadian stocks closed higher on Monday, extending Friday’s rally as increased odds that the U.S. Federal Reserve will lower its Fed funds target rate in December helped investors look past concerns about inflated tech valuations.

U.S. indexes embarked on the holiday-shortened week with solid gains, with strength in the “Magnificent Seven” group of artificial-intelligence-related momentum stocks putting the tech-heavy Nasdaq out front. The technology sector also led gainers in Canada, with the S&P/TSX Composite Index closing at its highest level since its last record high on Nov. 12.

A spate of U.S. economic reports, belatedly released after the recent six-week government shutdown, hinted at labour market weakness and stubbornly elevated inflation, which has bolstered investor optimism that the Fed will implement its third and final interest rate cut of 2025 at the conclusion of its December monetary meeting.

Dovish commentary from Fed Governor Christopher Waller, New York Fed President John Williams, and San Francisco Fed President Mary Daly lent some support to that optimism, although other policymakers voiced dissenting opinions.
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The Dow Jones Industrial Average rose 202.86 points, or 0.44%, to 46,448.27, the S&P 500 gained 102.13 points, or 1.55%, to 6,705.12 and the Nasdaq Composite gained 598.92 points, or 2.69%, to 22,872.01.

The S&P/TSX composite index ended up 443.70 points, or 1.47%, at 30,604.35.

I was interested to read the following in the IAIS document Insurance Core Principles and Common Framework for the Supervision of Internationally Active Insurance Groups:

17.2.5 Regulatory capital resources protect the interests of policyholders by meeting the following two objectives:
• reducing the probability of insolvency by absorbing losses on a going concern basis or in solvent run-off; and/or
• reducing the loss to policyholders in the event of liquidation or resolution.
17.2.6 The extent to which capital elements (as described in Figure 17.3) achieve the above objectives will vary depending on their characteristics or quality. For example, ordinary share capital may be viewed as achieving both objectives, whereas subordinated debt may be viewed largely as only protecting policyholders in insolvency. Capital resources that achieve both objectives are sometimes termed “core regulatory capital resources” or similar (see Guidance 17.11.37) and capital resources that only reduce the loss to policyholders in liquidation or resolution are generally termed “winding-up capital” or “gone concern capital”. It would be expected that core regulatory capital resources should form the substantial part of capital resources.

I continue to hope to see the day when the banks’ NVCC rules are applied to insurers, as this will reduce the probability of insolvency by absorbing losses on a going concern basis or in solvent run-off.

Oh, and I just noticed this press release from the OSC dated 2024-11-27:

The Ontario Securities Commission (OSC) is announcing it will provide funding of up to $2 million per year, to a total of $11 million, to FAIR Canada (FAIR) – a national charitable organization dedicated to advancing and promoting the interests of individual investors. This new funding arrangement will provide a stable source of funding for FAIR for the next six years.

“FAIR provides an important and independent voice for investors, advocating for their interests on securities policy issues,” said Grant Vingoe, OSC CEO. “This contribution provides a steady and stable source of funding over the next six years to support FAIR with its important work.”

The funding will be provided from sanction and settlement funds held by the Commission in two installments, the first of which will be paid to FAIR immediately, with a second installment provided in 2027. FAIR can only draw a maximum of $2 million per year under the agreement. This funding will be used to support FAIR’s day-to-day operations.

The mandate of the OSC is to provide protection to investors from unfair, improper or fraudulent practices, to foster fair, efficient and competitive capital markets and confidence in the capital markets, to foster capital formation, and to contribute to the stability of the financial system and the reduction of systemic risk. Investors are urged to check the registration of any persons or company offering an investment opportunity and to review the OSC investor materials available at https://www.osc.ca.

Looking at the FAIRCanada website’s “Team” page we find:

Jean-Paul is the Executive Director, President and CEO of FAIR Canada. Prior to joining FAIR Canada in 2020, he was a financial sector expert at the World Bank Group assisting countries to enhance their securities regulatory regimes. He is a former member of the Executive Management Team at the Ontario Securities Commission, where he worked for 20 years in senior leadership and policy roles. He began his legal career at a national law firm advising clients on securities law matters.

and

Pira Kumarasamy brings a wealth of experience in communications, media relations, and strategic social media planning. With a strong background in agency work and consulting, she has led impactful communications projects across various industries. Before joining FAIR Canada, Pira served as Senior Manager, Communications and Public Affairs at The Investment Funds Institute of Canada (now called Securities and Investment Management Association). She has also freelanced as a writer and consultant for fintech and personal finance publications.

and

Prior to joining FAIR Canada, Bruce worked in-house as a lawyer at a Toronto Stock Exchange-listed reporting issuer headquartered in Edmonton. In this role, Bruce’s main responsibilities included corporate finance transactions, public disclosure, public company and subsidiary governance, and corporate reorganizations. During part of his tenure at the organization, he also served as Assistant Corporate Secretary. Bruce began his career at a private firm in Edmonton, where he worked on a variety of corporate and commercial matters. He is a member of the Law Society of Alberta.

So of the four “team” members, one is an ex-OSC honcho and two were employed by elements of the investment industry Family Compact. It’s so nice that the OSC is cutting cheques to ensure their continued employment!

TXPR closed at 676.09, down 0.72% on the day. Volume today was 1.96-million, second-highest of the past 21 trading days.

CPD closed at 13.40, down 0.67% on the day. Volume was 49,200, well above the median of the past 21 trading days.

ZPR closed at 11.855, down 0.80% on the day. Volume was 146,500, third-highest of the past 21 trading days.

Five-year Canada yields were down 3bp to 2.80%.

The rather late September US jobs number is getting mixed reviews:

The economy added 119,000 jobs in September, more than double what forecasters had expected and well above the 71,000-job average for the rest of 2025. Numbers for the previous two months were revised down slightly, erasing 33,000 job gains from July and August, which made September look more like an acceleration.

However, the strength was not widely distributed.

As has been the case for the past two years, job growth was largely supplied by the health care industry, which added 43,000 jobs. Bars and restaurants added 37,000, an indication of robust spending on hospitality services.

Both of those sectors are tied to an economy that is aging and lately powered by higher-income consumers, who have been spending freely on discretionary services while those on the lower end of the income spectrum struggle to keep up with their bills.

The equities market responded with uncertainty:

Bullish investors lost their nerve on Thursday and a brief rally in stocks went into reverse as concerns about overvalued A.I. companies crept back into the market.

The midday fade came after strong gains in early morning trading in what investors and analysts initially attributed to relief after solid earnings reports from Nvidia, the flag-bearer of the move toward artificial intelligence that has propelled technology stock prices higher, and Walmart, a bellwether of consumer health.

But investors’ early enthusiasm quickly gave way to afternoon selling pressure.

The S&P 500 tumbled after climbing as much as 1.9 percent in morning trading. The benchmark ended the day 1.6 percent lower, a reversal of more than 3 percent from its highest point.

Sorry this is late!

TXPR closed at 681.02, down 0.59% on the day. Volume today was 1.37-million, third-highest of the past 21 trading days.

CPD closed at 13.49, down 1.46% on the day. Volume was 34,101, below the median of the past 21 trading days.

ZPR closed at 11.95, down 0.83% on the day. Volume was 86,360, below the median of the past 21 trading days.

Five-year Canada yields were up to 2.83%.

Funny day:

Stocks ended mixed on Friday as investors looked ahead to Nvidia’s quarterly results next week and worried that the Federal Reserve may hold off on cutting U.S. interest rates in December.

The market partly recovered after a selloff early in the session that dragged all three major Wall Street indexes as well as Canada’s main index down more than 1%.

Investors in recent days have fretted about the pace of rate cuts and pricey valuations of heavyweight artificial intelligence stocks that have fueled much of the U.S. stock market’s gains in recent years.

Nvidia, Palantir and Microsoft each gained more than 1%.

Expectations the Fed will cut rates at its December policy meeting have faded in recent days amid signs of persistent inflation, caused in part by U.S. President Donald Trump’s global tariffs. The probability of a 25-basis-point rate cut in December has fallen to under 50% from 67% last week, according to CME Group’s FedWatch tool.

Kansas City Fed President Jeffrey Schmid said on Friday his concerns about “too hot” inflation go well beyond the narrow effects of tariffs, signaling that he could dissent again at the Fed’s December meeting should policymakers opt to cut short-term borrowing costs. He was one of two dissenters in the Fed’s October decision to lower the policy rate by a quarter of a percentage point.
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The S&P 500 fell 0.05% to end at 6,734.11 points.

The Nasdaq gained 0.13% to 22,900.59 points, while the Dow Jones Industrial Average declined 0.65% to 47,147.48 points.

The S&P/TSX composite index ended up 72.82 points, or 0.2%, at 30,326.46. For the week, the index was up 1.4%. It touched on Wednesday a record closing high at 30,827.58.

The TXPR Price Index was down 0.44% on the day.

Carnage and despair was the order of the day:

Wall Street ended sharply lower on Thursday, with steep losses in Nvidia and other AI heavyweights, as investors scaled back expectations of interest rate cuts due to inflation worries and divisions among central bankers about the U.S. economy’s health. The selloff extended to Canada, where the main index posted its biggest decline in seven months, with tech stocks leading the fall.

All three major U.S. stock indexes posted their steepest daily percentage declines in over a month. The U.S. government reopened after a record 43-day shutdown that had worried investors and disrupted the flow of economic data.

A growing number of Federal Reserve policymakers in recent days have signaled hesitation about further interest rate cuts, pushing financial market-based odds of a reduction in borrowing costs in December to near even. Fed officials who spoke recently cited worries about inflation and signs of relative stability in the labour market after two U.S. interest rate cuts this year.
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Traders are pricing in about a 47% chance of a 25-basis-point rate cut in December, lower than last week’s 70% probability, according to CME Group’s FedWatch tool.

Shares fell for some of the U.S. stock market’s strongest performers in recent years, as investors fretted about high valuations fueled by optimism about artificial intelligence.

Nvidia, the world’s most valuable company, dropped 3.6%, Tesla fell 6.6% and Broadcom declined 4.3%.
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The S&P 500 declined 1.66% to end the session at 6,737.49 points. The Nasdaq fell 2.29% to 22,870.36 points, while the Dow Jones Industrial Average declined 1.65% to 47,457.22 points.

The S&P/TSX composite index ended down 573.94 points, or 1.9%, at 30,253.64, after posting a record high closing level on Wednesday.

Canadian preferreds got off lightly, with the TXPR Price Index down 22bp.