At present, it appears that confidence in the markets is increased by regulation (at least according to the regulators):
Singapore will introduce a minimum price for mainboard shares and reduce the lot size for transactions after a slump in the stocks of three commodity companies erased $6.9 billion in market value over three days in October.
The city-state will impose a minimum trading price of S$0.20 to address risks of low-priced securities being more susceptible to excessive speculation and potential market manipulation, according to a joint statement by the Monetary Authority of Singapore and Singapore Exchange Ltd. (SGX) yesterday. Other new measures include collection of a 5 percent collateral and reporting of short positions.
The day will come when confidence in the markets is decreased by regulation.
Today’s jobs number was good, but not great:
Today’s U.S. jobs report supports Federal Reserve Chair Janet Yellen’s view that there’s still plenty of slack left in the labor market, bolstering the case for continued stimulus, economists said.
While the Labor Department report showed employers added more than 200,000 jobs for the sixth straight month in July, there were also signs of continued weakness. A broad measure of unemployment that includes people working part-time because they can’t find full-time jobs increased last month, while wages stagnated, the report showed.
…
The headline unemployment rate unexpectedly rose to 6.2 percent from 6.1 percent as more people sought jobs. The share of Americans employed or looking for work, known as the participation rate, increased to 62.9 percent in July from 62.8 percent in June, which matched the lowest level since 1978.
Junk ETFs got hammered this week:
It’s been an ugly week for U.S. high-yield bonds, the worst in more than a year.
As investors fled, they turned to the easiest exits and pulled more than $1 billion from exchange-traded funds, according to data compiled by Bloomberg. With Wall Street banks generally devoting less capital to trading, there wasn’t much of a buffer on the other side to prop up values.
The result: Yields on the notes posted their biggest weekly increase since May 2012, surging to 5.7 percent from 5.3 percent on July 25, according to Barclays U.S. Corporate High Yield index data. The notes tumbled 1.3 percent in July, the first month of losses since last August.
Interesting to see continued muttering about dealer inventories. Eventually, something’s gotta give.
Water woes in California are getting severe:
Rod Cardella, a Mendota, California, grower of wine grapes, onions and almonds, had to wait a year to have a fourth water well dug on his property as the record drought gripping the most populous U.S. state increased demand for groundwater.
Cardella, 66, who founded Cardella Ranch with his father in 1970 and produces grapes for E&J Gallo Winery, the largest exporter of California wines, paid $500,000 to add the well in June after the federal government said it wouldn’t supply his area with its usual water allocation. The drought forced Cardella to leave half his ranch, including onion and cotton fields, unplanted this year.
…
With 82 percent of California now experiencing extreme drought after three years of record low rainfall, reservoirs are 45 percent below normal and declining. Governor Jerry Brown has called for a statewide voluntary reduction of water use by 20 percent, and residents now face fines of as much as $500 a day for wasting water.Farmers have left fallow an estimated half-million acres. The dry spell is likely to boost the prices of food nationwide, according to the U.S. Agriculture Department, as farm and shipping interests stand to lose billions in revenue. California produces half of the fruits, vegetables and nuts consumed in the U.S. The price that some farmers pay for water has risen as much as 10 times what it cost before the drought.
Maybe desalinization plants could run off solar energy? That sounds like a good use for intermittent power.
But we won’t answer that question in Canada:
According to the most recent data from the OECD (from 2011), Canada falls well behind most other wealthy nations on total spending on research and development. At 1.74 per cent of GDP, we lag behind countries including the U.S. (2.77 per cent), Sweden (3.37 per cent) and Finland (3.78 per cent). Israel, a powerhouse in innovation and creative design, tops the list at 4.38 per cent.
It was a mixed day for the Canadian preferred share market, with PerpetualDiscounts up 15bp, FixedResets off 4bp and DeemedRetractibles down 9bp. Volatility was minor. Volume was virtually non-existent, as everybody took a holiday except for the minimum-wage scum.
| 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 | 0.0000 % | 2,607.5 |
| FixedFloater | 4.16 % | 3.39 % | 26,907 | 18.64 | 1 | 0.2193 % | 4,173.0 |
| Floater | 2.94 % | 3.06 % | 45,165 | 19.55 | 4 | 0.0000 % | 2,696.3 |
| OpRet | 4.03 % | 0.23 % | 78,630 | 0.08 | 1 | -0.0785 % | 2,714.7 |
| SplitShare | 4.25 % | 3.89 % | 55,639 | 3.99 | 6 | -0.1608 % | 3,117.5 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.0785 % | 2,482.3 |
| Perpetual-Premium | 5.49 % | -3.99 % | 91,665 | 0.09 | 19 | 0.0993 % | 2,434.6 |
| Perpetual-Discount | 5.22 % | 5.17 % | 117,015 | 15.22 | 17 | 0.1459 % | 2,590.1 |
| FixedReset | 4.29 % | 3.56 % | 198,723 | 8.57 | 75 | -0.0408 % | 2,558.3 |
| Deemed-Retractible | 4.99 % | -0.38 % | 115,073 | 0.15 | 42 | -0.0948 % | 2,552.9 |
| FloatingReset | 2.68 % | 2.22 % | 81,224 | 3.86 | 6 | -0.1448 % | 2,511.3 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| MFC.PR.F | FixedReset | -3.10 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.51 Bid-YTW : 4.42 % |
| IGM.PR.B | Perpetual-Premium | 1.08 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-12-31 Maturity Price : 26.00 Evaluated at bid price : 26.30 Bid-YTW : 2.86 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| TD.PF.B | FixedReset | 286,749 | Recent new issue. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-08-01 Maturity Price : 23.19 Evaluated at bid price : 25.09 Bid-YTW : 3.62 % |
| BMO.PR.W | FixedReset | 201,265 | Recent new issue. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-08-01 Maturity Price : 23.13 Evaluated at bid price : 24.97 Bid-YTW : 3.61 % |
| ENB.PF.E | FixedReset | 67,748 | Recent new issue. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-08-01 Maturity Price : 23.10 Evaluated at bid price : 24.95 Bid-YTW : 4.13 % |
| PWF.PR.T | FixedReset | 51,000 | Nesbitt crossed 50,000 at 26.00. YTW SCENARIO Maturity Type : Call Maturity Date : 2019-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.86 Bid-YTW : 3.39 % |
| RY.PR.X | FixedReset | 36,200 | Called for redemption, August 24. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-09-23 Maturity Price : 25.00 Evaluated at bid price : 24.99 Bid-YTW : 3.84 % |
| MFC.PR.C | Deemed-Retractible | 32,452 | Scotia crossed 24,200 at 22.82. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.60 Bid-YTW : 5.83 % |
| There were 10 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| PWF.PR.O | Perpetual-Premium | Quote: 26.00 – 26.86 Spot Rate : 0.8600 Average : 0.5365 YTW SCENARIO |
| MFC.PR.F | FixedReset | Quote: 22.51 – 23.20 Spot Rate : 0.6900 Average : 0.5472 YTW SCENARIO |
| SLF.PR.H | FixedReset | Quote: 25.45 – 25.83 Spot Rate : 0.3800 Average : 0.2632 YTW SCENARIO |
| FTS.PR.F | Perpetual-Discount | Quote: 24.51 – 24.85 Spot Rate : 0.3400 Average : 0.2268 YTW SCENARIO |
| PVS.PR.C | SplitShare | Quote: 25.95 – 26.20 Spot Rate : 0.2500 Average : 0.1608 YTW SCENARIO |
| BAM.PR.G | FixedFloater | Quote: 22.85 – 23.11 Spot Rate : 0.2600 Average : 0.1784 YTW SCENARIO |