Today’s big news was a lousy US jobs number:
The 74,000 gain in payrolls, less than the most pessimistic projection in a Bloomberg survey, followed a revised 241,000 advance the prior month, Labor Department figures showed today in Washington. The median forecast of 90 economists called for an increase of 197,000. The unemployment rate dropped to 6.7 percent, the lowest since October 2008, as more people left the labor force.
It was even worse in Canada:
The Canadian economy unexpectedly shed 45,900 jobs in December, the steepest decline in nine months, led by a drop in full-time positions.
The country’s jobless rate rose to 7.2 per cent in December from 6.9 per cent, Statistics Canada said Friday, putting it at a five-month high.
Canada’s job growth slowed by year’s end as a string of companies, from Sears Canada Inc. to Potash Corp. of Saskatchewan Inc. and BlackBerry Ltd., announced job cuts while a wave of manufacturers, particularly in Central Canada, said they plan to close plants. Through 2013, job gains in Canada averaged 8,500 a month, a sharp drop from the average of 25,900 new positions per month in 2012.
December’s weak reading, which sent the Canadian dollar to a new four-year low, was far below expectations as the number of full-time positions tumbled by 60,000. Economists had forecast about 14,000 new jobs and an unchanged rate.
And Fischer got the White House nod for Fed vice-chair:
Stanley Fischer, former head of the Bank of Israel, will be nominated to serve as vice chairman of the Federal Reserve, the Obama administration said.
Fischer, 70, would replace Janet Yellen, who was approved by the Senate this week for the chairmanship of the U.S. central bank. Lael Brainard, formerly the U.S. Treasury Department’s top international official, will fill an empty seat on the board, and Jerome Powell is being nominated for a second term, according to a statement today from the White House.
DBRS confirmed DF.PR.A at Pfd-3(low):
Since the last rating confirmation in September 2013, the net asset value (NAV) of the Company has been increasing. As of December 31, 2013, the downside protection available to the Preferred Shares is approximately 40.2%, and the dividend coverage ratio is 0.82 times. The Pfd-3 (low) rating of the Preferred Shares is based primarily on the downside protection available and the additional protection provided by an asset coverage test, which does not permit any distributions to holders of the Class A Shares if the NAV of the Company falls below $15.
DBRS confirmed FTN.PR.A at Pfd-4(high):
Since the last rating confirmation in January 2013, the NAV of the Company has improved as U.S. and Canadian financial institutions outperformed the broader North American equity indices. Downside protection available to holders of the Preferred Shares rose to 41.6% as of December 31, 2013, from 32.8% on December 31, 2012. Despite the increased downside protection, the current dividend coverage ratio of around 0.65 and the reinstatement of Class A Share distributions result in an average grind of approximately 10% over the next two years. As a result, the rating has been confirmed at Pfd-4 (high).
And it was mostly good for the Canadian preferred share market today, although not as good as one might have thought, given an astonishing 13bp decline in the Ten-Year Canada yield, with PerpetualDiscounts off 1bp, FixedResets gaining 13bp and DeemedRetractibles up 15bp. The Performance Highlights table isn’t particularly lengthy but is uniformly positive and dominated by FixedResets. Volume was a little below average.
| 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 | -0.0741 % | 2,558.6 |
| FixedFloater | 4.38 % | 3.67 % | 34,026 | 17.91 | 1 | 0.6030 % | 3,832.3 |
| Floater | 2.92 % | 2.94 % | 66,183 | 19.91 | 3 | -0.0741 % | 2,762.6 |
| OpRet | 4.62 % | 1.09 % | 78,674 | 0.08 | 3 | 0.1157 % | 2,670.8 |
| SplitShare | 4.85 % | 4.67 % | 68,346 | 4.44 | 5 | 0.0241 % | 3,023.7 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1157 % | 2,442.2 |
| Perpetual-Premium | 5.63 % | 4.01 % | 129,626 | 0.15 | 13 | 0.0429 % | 2,322.2 |
| Perpetual-Discount | 5.63 % | 5.64 % | 168,949 | 14.46 | 25 | -0.0054 % | 2,358.4 |
| FixedReset | 4.95 % | 3.47 % | 211,576 | 3.39 | 82 | 0.1262 % | 2,485.6 |
| Deemed-Retractible | 5.13 % | 4.22 % | 165,772 | 2.00 | 42 | 0.1538 % | 2,408.7 |
| FloatingReset | 2.60 % | 2.33 % | 228,169 | 4.34 | 5 | 0.1666 % | 2,473.9 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| SLF.PR.G | FixedReset | 1.04 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.25 Bid-YTW : 4.66 % |
| MFC.PR.F | FixedReset | 1.10 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.15 Bid-YTW : 4.83 % |
| ENB.PR.N | FixedReset | 1.15 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-01-10 Maturity Price : 23.03 Evaluated at bid price : 24.60 Bid-YTW : 4.33 % |
| GWO.PR.Q | Deemed-Retractible | 1.21 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.38 Bid-YTW : 6.02 % |
| ENB.PR.F | FixedReset | 1.38 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-01-10 Maturity Price : 22.90 Evaluated at bid price : 24.19 Bid-YTW : 4.32 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| TRP.PR.D | FixedReset | 168,722 |
YTW SCENARIO Maturity Type : Call Maturity Date : 2019-04-30 Maturity Price : 25.00 Evaluated at bid price : 25.18 Bid-YTW : 3.82 % |
| ENB.PR.H | FixedReset | 73,413 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-01-10 Maturity Price : 22.33 Evaluated at bid price : 23.05 Bid-YTW : 4.25 % |
| BNS.PR.P | FixedReset | 63,120 | YTW SCENARIO Maturity Type : Call Maturity Date : 2018-04-25 Maturity Price : 25.00 Evaluated at bid price : 25.20 Bid-YTW : 3.11 % |
| ENB.PR.F | FixedReset | 48,972 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-01-10 Maturity Price : 22.90 Evaluated at bid price : 24.19 Bid-YTW : 4.32 % |
| BNS.PR.R | FixedReset | 41,405 | Will reset at 3.83%. Yield to Deemed Maturity is 3.55%. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-02-25 Maturity Price : 25.00 Evaluated at bid price : 25.21 Bid-YTW : -4.00 % |
| RY.PR.L | FixedReset | 36,322 | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-02-24 Maturity Price : 25.00 Evaluated at bid price : 25.35 Bid-YTW : 0.08 % |
| There were 27 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| FTS.PR.K | FixedReset | Quote: 24.43 – 24.89 Spot Rate : 0.4600 Average : 0.3027 YTW SCENARIO |
| TRP.PR.C | FixedReset | Quote: 21.90 – 22.38 Spot Rate : 0.4800 Average : 0.3330 YTW SCENARIO |
| TD.PR.P | Deemed-Retractible | Quote: 25.83 – 26.20 Spot Rate : 0.3700 Average : 0.2331 YTW SCENARIO |
| PWF.PR.P | FixedReset | Quote: 22.67 – 22.97 Spot Rate : 0.3000 Average : 0.1878 YTW SCENARIO |
| FTS.PR.H | FixedReset | Quote: 21.51 – 21.81 Spot Rate : 0.3000 Average : 0.1899 YTW SCENARIO |
| TD.PR.O | Deemed-Retractible | Quote: 25.21 – 25.44 Spot Rate : 0.2300 Average : 0.1327 YTW SCENARIO |