Good. But not too good.
That is the verdict from economists after the Labor Department reported on Friday that in August employers added 151,000 jobs, the unemployment rate was unchanged at 4.9 percent, and wage gains were modest. It was a solid performance that keeps the economy on track, but not strong enough to push the Federal Reserve to raise its benchmark interest rate when policy makers meet this month.
…
The jobless rate, based on a separate survey of households, stayed at 4.9 percent, roughly half of what it was seven years ago, and consumer spending remains healthy. But a broader measure of unemployment that includes discouraged and underemployed workers is nearly twice that figure.Wages have only recently begun to climb. The 12-month increase was a modest 2.4 percent in August, slower than in the previous month but a pace that keeps most workers ahead of inflation.
Traders are pricing in a 32 percent chance the central bank will raise borrowing costs at its September meeting, down from 34 percent before the jobs data, though the probability earlier slipped as low as 20 percent. The first month with better-than-even odds of a hike is December.
Those wagers have influenced trading with stocks, bonds and the dollar amid a spate of mixed economic data and comments from central bank officials. Financial markets were taken aback on Thursday by weak manufacturing numbers, after other reports pointed to a recovery on the heels of still-robust consumer spending. While Fed Chair Janet Yellen said last week that the case for an increase in borrowing costs has strengthened, wagers on a hike receded even before the jobs figures.
Richmond Fed President Jeffrey Lacker said Friday the message he took from the August data was that “labor markets are continuing to tighten.” He called the report “reasonably strong.”
In a sign of the times, McDonald’s is becoming more corporate:
McDonald’s has long been famous for its small-owner-focused franchise system, in which entrepreneurs with only a store or two would sweat the details of their restaurants, yielding better customer service. Lately, however, the fast-food giant has begun shedding mom and pop owners in favor of bigger operators. Since 2014 the number of U.S. McDonald’s franchise owners has dropped 2.6 percent, while the number of franchised locations has grown 1.2 percent, according to data compiled by researcher FranchiseGrade.com. The chain’s biggest franchisees are getting larger, while those who own five locations or fewer are on the wane.
Getting rid of smaller franchisees allows McDonald’s to speed renovations and the implementation of new technology, such as the self-ordering touchscreens being tested in about 250 locations. Such gear can be expensive, and smaller franchisees often don’t have the capital to pay up—making them less willing to embrace the company’s plans.
…
There are about 1,842 domestic McDonald’s franchisees who own five restaurants or fewer, compared with 1,930 in 2014, a 4.6 percent drop, the FranchiseGrade.com data show. There’s been about a 12 percent jump, however, in the number of those operating more than 10 stores: 245 now, vs. 218 in 2014. McDonald’s spokeswoman Becca Hary says that stores often end up in the hands of larger operators when smaller ones sell out, but both big and small operators are among its best franchises.
Capital requirements are pretty steep – it’s not a middle-class business environment any more!
Click for Big
| HIMIPref™ Preferred Indices These values reflect the December 2008 revision of the HIMIPref™ Indices Values are provisional and are finalized monthly |
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| 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 | 0.1970 % | 1,682.8 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1970 % | 3,074.1 |
| Floater | 4.88 % | 4.64 % | 81,165 | 16.07 | 4 | 0.1970 % | 1,771.6 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0000 % | 2,881.5 |
| SplitShare | 5.05 % | 4.35 % | 91,930 | 2.23 | 5 | 0.0000 % | 3,441.1 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0000 % | 2,684.9 |
| Perpetual-Premium | 5.49 % | 3.76 % | 74,173 | 0.16 | 12 | -0.0779 % | 2,680.4 |
| Perpetual-Discount | 5.12 % | 5.10 % | 99,602 | 14.96 | 26 | -0.0190 % | 2,904.9 |
| FixedReset | 4.94 % | 4.29 % | 141,403 | 7.23 | 89 | -0.0487 % | 2,056.1 |
| Deemed-Retractible | 5.01 % | 3.68 % | 114,064 | 0.33 | 32 | -0.0939 % | 2,802.1 |
| FloatingReset | 2.84 % | 3.92 % | 31,152 | 5.05 | 12 | 0.0304 % | 2,219.3 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| PWF.PR.P | FixedReset | -1.69 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-09-02 Maturity Price : 13.39 Evaluated at bid price : 13.39 Bid-YTW : 4.33 % |
| CCS.PR.C | Deemed-Retractible | -1.30 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.22 Bid-YTW : 5.44 % |
| MFC.PR.K | FixedReset | -1.09 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 17.25 Bid-YTW : 8.37 % |
| IAG.PR.G | FixedReset | -1.07 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 19.50 Bid-YTW : 7.11 % |
| GWO.PR.N | FixedReset | -1.05 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 14.10 Bid-YTW : 9.84 % |
| MFC.PR.J | FixedReset | -1.05 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 18.86 Bid-YTW : 7.42 % |
| PWF.PR.T | FixedReset | -1.02 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-09-02 Maturity Price : 20.30 Evaluated at bid price : 20.30 Bid-YTW : 3.98 % |
| VNR.PR.A | FixedReset | 1.08 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-09-02 Maturity Price : 18.77 Evaluated at bid price : 18.77 Bid-YTW : 4.80 % |
| RY.PR.H | FixedReset | 1.33 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-09-02 Maturity Price : 19.05 Evaluated at bid price : 19.05 Bid-YTW : 4.08 % |
| MFC.PR.G | FixedReset | 1.41 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 19.43 Bid-YTW : 7.18 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| TRP.PR.J | FixedReset | 144,675 | YTW SCENARIO Maturity Type : Call Maturity Date : 2021-05-31 Maturity Price : 25.00 Evaluated at bid price : 26.18 Bid-YTW : 4.42 % |
| RY.PR.H | FixedReset | 56,375 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-09-02 Maturity Price : 19.05 Evaluated at bid price : 19.05 Bid-YTW : 4.08 % |
| TD.PF.C | FixedReset | 52,600 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-09-02 Maturity Price : 18.85 Evaluated at bid price : 18.85 Bid-YTW : 4.13 % |
| BAM.PR.K | Floater | 34,300 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-09-02 Maturity Price : 10.32 Evaluated at bid price : 10.32 Bid-YTW : 4.64 % |
| RY.PR.J | FixedReset | 32,700 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-09-02 Maturity Price : 20.36 Evaluated at bid price : 20.36 Bid-YTW : 4.28 % |
| BNS.PR.Q | FixedReset | 31,000 | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.17 Bid-YTW : 3.66 % |
| There were 14 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| PWF.PR.T | FixedReset | Quote: 20.30 – 20.78 Spot Rate : 0.4800 Average : 0.3793 YTW SCENARIO |
| GWO.PR.L | Deemed-Retractible | Quote: 25.56 – 25.98 Spot Rate : 0.4200 Average : 0.3217 YTW SCENARIO |
| GWO.PR.F | Deemed-Retractible | Quote: 25.82 – 26.15 Spot Rate : 0.3300 Average : 0.2554 YTW SCENARIO |
| HSE.PR.A | FixedReset | Quote: 12.02 – 12.30 Spot Rate : 0.2800 Average : 0.2095 YTW SCENARIO |
| PWF.PR.P | FixedReset | Quote: 13.39 – 13.65 Spot Rate : 0.2600 Average : 0.1941 YTW SCENARIO |
| CCS.PR.C | Deemed-Retractible | Quote: 24.22 – 24.56 Spot Rate : 0.3400 Average : 0.2744 YTW SCENARIO |