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TXPR closed at 585.84, down 0.71% on the day. Volume today was 2.94-million, highest of the past thirty days, ahead of second-place February 28.

CPD closed at 11.71, down 0.51% on the day. Volume of 417,130 was the highest of the past 30 days, more than double second-place February 27.

ZPR closed at 9.37, down 1.16% on the day. Volume of 474,263 was fourth-highest of the past 30 days, with the top three all occurring last week.

Five-year Canada yields were down 2bp to 1.05% today.

Equity markets did well today, thanks to the Greenspan Put:

Stocks surged in the final minutes of trading on Monday, snapping back from one of the worst weeks for global markets since the 2008 financial crisis as investors seized on promises that the world’s governments would step in to help if the global economy was slammed by the outbreak of the coronavirus.

The S&P 500 jumped 4.6 percent, the biggest single-day leap since late December 2018. The rally followed news that central bankers from the world’s biggest economies would join a conference call with Group of 7 finance ministers on Tuesday to discuss a response to the outbreak, fueling expectations among investors that governments might lower interest rates in tandem.
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Early Monday, both the Bank of Japan and Bank of England pledged to monitor markets closely and safeguard financial stability. Later, the International Monetary Fund and the World Bank issued a joint statement saying that the groups stood ready to help “address the human tragedy and economic challenge” posed by the virus, and the European Central Bank said it “stands ready” to respond to signs of a slowdown.

The conference call will take place tomorrow:

Finance ministers and central bank chiefs from G7 countries will hold talks Tuesday amid rising global uncertainty over the coronavirus epidemic, the US Treasury said Monday.

US Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell “will lead a call with their G7 counterparts tomorrow morning,” the department confirmed in a statement.

The Bank of Canada is expected to join in:

Expectations of a Bank of Canada interest-rate cut this week have rapidly moved from unlikely to imminent as global governments and central banks begin to respond en masse to the escalating economic threat from the COVID-19 virus.

With Canada’s top central bankers in closed-door deliberations for Wednesday’s regularly scheduled interest-rate decision, bond-market indicators show traders have now fully priced in a quarter-percentage-point cut in the Bank of Canada’s key overnight rate, to 1.5 per cent from 1.75 per cent. A week ago, market pricing indicated only 30-per-cent odds of a cut.

The September hiccup in the US repo market was discussed on September 20 and September 23. Now Gara Afonso, Marco Cipriani, Adam Copeland, Anna Kovner, Gabriele La Spada, and Antoine Martin of the New York Fed weigh in with a staff report titled The Market Events of Mid-September 2019:

This paper studies the mid-September 2019 stress in U.S. money markets: On September 16 and 17, unsecured and secured funding rates spiked up and, on September 17, the effective federal funds rate broke the ceiling of the Federal Open Market Committee (FOMC) target range. We highlight two factors that may have contributed to these events. First, reserves may have become scarce for at least some depository institutions, in the sense that these institutions’ reserve holdings may have been close to, or lower than, their desired level. Moreover, frictions in the interbank market may have prevented the efficient allocation of reserves across institutions, so that although aggregate reserves may have been higher than the sum of reserves demanded by each institution, they were still scarce given the market’s inability to allocate reserves efficiently. Second, we provide evidence that some large domestic dealers likely experienced an increase in intermediation costs, which led them to charge higher spreads to ultimate cash borrowers. This increase was due to a temporary reduction in lending from money market mutual funds, including through the Fixed Income Clearing Corporation’s (FICC’s) sponsored repo program.

At 2015.40, the HIMIPref™ FixedReset (Discount) total return subindex is getting perilously close to the August 28, 2019, low point of 1936.03.

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Well, let’s just be grateful that February is a short month:

Stocks tumbled for a seventh consecutive day on Friday, with the S&P 500 index falling about 0.8 percent, bringing its loss for the week to more than 11 percent. It was the worst weekly decline for stocks since the 2008 financial crisis. In early October that year, the S&P 500 fell about 18 percent.

The Dow Jones industrial average fell more than 1 percent on Friday.
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Here’s how the major indexes around the world fared this week:

S&P 500 in United States: 11%

Dow Jones in United States: 12%

FTSE 100 in Britain: 11%

DAX in Germany: 12%

KOSPI in South Korea: 8%

Hang Seng Index in Hong Kong: 4%

Nikkei 225 in Japan: 10%

I see the TSX Composite was down 2.72% today, and down 8.68% on the week.

And in the Treasury market:

The yield on the benchmark 10-year United States Treasury bonds fell to a record low of 1.16 percent in trading Friday morning, down from 1.9 percent at the start of the year and 2.7 percent one year ago. From Japan to Germany to Australia, every other major economy is experiencing a similar shift.

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TXPR closed at 590.00, down 1.74% on the day and the Total Return version down 4.30% on the week and 3.38% on the month. Volume today was 2.61-million, second-highest of the past thirty days, behind only January 30.

CPD closed at 11.77, down 1.51% on the day. Volume of 127,586 was the fourth-highest of the past 30 days … each of the three bigger days happened this week.

ZPR closed at 9.48, down 0.42% on the day. Volume of 734,205 was second-highest of the past 30 days, behind only February 24.

Five-year Canada yields were down 6bp to 1.07% today.

There is renewed speculation about a Fed rate cut:

Federal Reserve officials signaled a willingness to cut interest rates if the coronavirus outbreak worsens, laying out a scenario in which the central bank might respond as infections and quarantines spread globally.

“We could cut rates if we got a global pandemic that actually develops with health effects that seem to be approaching the same level as seasonal influenza, but that doesn’t look like the baseline as of today,” James Bullard, president of the Federal Reserve Bank of St. Louis, said during a speech in Florida on Friday. Mr. Bullard does not vote on rate moves this year, but he is one of 17 regional and Washington-based officials who participate in policy discussions.

… and Powell released a statement:

The fundamentals of the U.S. economy remain strong. However, the coronavirus poses evolving risks to economic activity. The Federal Reserve is closely monitoring developments and their implications for the economic outlook. We will use our tools and act as appropriate to support the economy.

The decline in oil prices has taken its toll on oil stocks which has taken a toll on OSP.PR.A, which I have recommended that shareholders retract. The NAVPU was a mere 8.73 as of February 27 … and maybe even less today, eh? So, unless there’s a March Miracle, this thing’s going to default … not technically, because technically preferred shares don’t default, but, well, for all intents and purposes …

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So today a coronavirus jumped out from behind a bush and attacked:

Global markets tumbled for a sixth consecutive day on Thursday, dragging down the S&P 500 more than 10 percent in just a week, reflecting rising fears over the coronavirus that is spreading quickly around the world.

The S&P 500 fell 4.4 percent on Thursday, the worst single day slide for the market since August 2011. The index is on pace for its worst weekly performance since the 2008 financial crisis. Stocks in Europe and Asia were also hard hit on Thursday.
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The collapse in investor confidence spread far beyond stocks. Crude oil fell more than 4 percent, as investors weighed the chance of growing economic paralysis related to travel restrictions, factory shutdowns and other measures to stop the outbreak.

Bond markets broadcast deep pessimism about the economy, as money flooded into Treasury markets, pushing prices sharply higher, and yields — which move in the opposite direction — to once-unthinkable depths. That drop, in part, reflects investors’ expectations that the Federal Reserve may have to cut interest rates to bolster the economy.

Meanwhile in Toronto:

The Toronto Stock Exchange, TSX-Venture Exchange and TSX Alpha will remain closed for the rest of the day following a “technical halt” that began mid afternoon, according to a TMX Group spokeswoman.
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The company said the market, which was halted shortly before 2 p.m., will remain in a “pre-open” state until further notice in order to allow traders to manage orders.

Those who might be concerned about the implications of this are urged to remember that the Competition Bureau and the OSC have devoted many hours to preventing a foreign takeover of the TMX, relieving anxiety that anybody might lose their job over this.

TXPR closed at 600.45, down 0.96% on the day. Volume was 1.79-million, about average in the context of the past thirty days.

CPD closed at 11.95, down 1.20% on the day. Volume of 183,615 was the highest of the past 30 days, ahead of second place February 26.

ZPR closed at 9.52, down 1.45% on the day. Volume of 487,610 was third-highest of the past 30 days, behind only February 24 and January 27.

Five-year Canada yields were down 9bp to 1.13% today.

There was a respite from the losses today:

Stocks on Wall Street were unsteady on Wednesday, dropping slightly after rebounding from back-to-back losses this week that had wiped more than 6 percent off the S&P 500.
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Oil prices edged lower. West Texas intermediate, the American benchmark, dipped under $50 a barrel. Brent crude, the international benchmark, was under $55 a barrel at 12 p.m.

The yield on the 10-year Treasury note fell even further on Wednesday after closing at a record low of 1.335 percent on Tuesday, a sign that investors expect growth in the United States to slow.

PerpetualDiscounts now yield 5.27%, equivalent to 6.85% interest at the standard equivalency factor of 1.3x. Long corporates now yield 3.00%, so the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”) has widened dramatically to 385bp from the 360bp reported February 19.

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Attack of the corona virus … Day 2:

A day after its worst one-day slide in two years, the S&P 500 closed down 3 percent on Tuesday, a decline that put the index deeper in the red for 2020.
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Investors moved into the safety of government bonds, pushing their prices up and yields down. The yield on the 10-year Treasury note closed at a record low of 1.335 percent and the 30-year bond also dropped to a record of 1.81 percent — two signals that investors expect growth in the United States to slow.
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In comments on Tuesday, [Federal Reserve] Vice Chairman Richard H. Clarida signaled that Fed was not yet ready to act, though it is monitoring economic developments related to the virus.

But in recent days, the market-based probability — derived from prices in the Fed funds futures market — of a rate cut at the Fed’s April meeting jumped to over 60 percent, according to data from CME. Last Wednesday, when markets were at record highs, the market was putting odds of a cut at the April meeting at less than 25 percent.

TXPR closed at 607.70, down 0.70% on the day. Volume was 1.83-million, about average in the context of the past thirty days.

CPD closed at 12.13, down 0.82% on the day. Volume of 109,537 was the fourth-highest of the past 30 days.

ZPR closed at 9.72, down 1.32% on the day. Volume of 301,864 was fifth-highest of the past 30 days.

Five-year Canada yields were unchanged at 1.22% today.

So … players are still using preferred shares to speculate on interest rates. Damned if I understand it.

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Sometimes things work! No sooner do I post a comment deprecating market timing than out jumps a coronavirus to punch us in the nose. Try predicting that in advance!:

The S&P 500 index, which had reached a record high as recently as Wednesday, fell 3.4 percent, its worst single-day performance since February 2018. As analysts issued new warnings that the outbreak could drag down economies around the globe, stocks fell enough to wipe out all of the index’s gains for 2020.

It was a turbulent day for stocks worldwide: European markets recorded their worst session since 2016, and major benchmarks in Asia also closed down.
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Airline and technology stocks were particularly hard hit on Monday. Delta Air Lines shares fell 6.3 percent and American Airlines slid 8.5 percent, while Apple stock fell 4.8 percent. The tech-heavy Nasdaq composite index dropped 3.7 percent.

The sell-off continued in Asia on Tuesday morning, starting in Japan: The Nikkei 225 fell about 4 percent after the start of trading in Tokyo.

Oil prices dropped, with a barrel of West Texas Intermediate crude slipping nearly 4 percent to roughly $51, a result of the reduced demand from idled factories and restricted travel.

Investors rushed to safety: Gold — viewed as a haven during market tumult — rose to a seven-year high. It’s up nearly 10 percent since the start of 2020.

And money poured into government bonds, pushing down bond yields, which move in the opposite direction of prices. The yield on the 10-year Treasury note fell to 1.37 percent, near the record low closing of 1.36, a level touched back in July 2016. The yield on the 30-year bond is already in record-low territory at 1.83 percent.

TXPR closed at 611.98, down 0.92% on the day. Volume was 2.21-million, above average in the context of the past thirty days but nothing special.

CPD closed at 12.23, down 1.13% on the day. Volume of 133,936 was the highest of the past 30 days, ahead of the second-place February 5.

ZPR closed at 9.85, down 0.71% on the day. Volume of 795,486 was by far the highest of the past 30 days, well ahead of January 24.

Five-year Canada yields were down 8bp to 1.22% today.