Jobs, jobs, jobs! And pay, too!
U.S. hiring picked up in January and wages rose at the fastest annual pace since the recession ended, as the economy’s steady move toward full employment extended into 2018.
Nonfarm payrolls rose 200,000 — compared with the median estimate of economists for a 180,000 increase — after an upwardly revised 160,000 advance, Labor Department figures showed Friday. The jobless rate held at 4.1 percent, matching the lowest since 2000, while average hourly earnings rose a more-than-expected 2.9 percent from a year earlier, the most since June 2009.
Naturally, the bond market reacted … and then stocks reacted to bonds:
The Dow Jones Industrial Average tumbled 666 points in the biggest plunge since June 2016, as the worsening bond rout stirred angst that the Federal Reserve will accelerate its rate-hike schedule.
….
•The yield on 10-year Treasuries rose five basis points to 2.834 percent. It touched 2.8525 earlier.
I believe that this is the worst week containing a super blue blood moon for equities for over one hundred and fifty years, which is probably pretty significant. Worst of all, some investors had their mellow harshed:
Marijuana stocks tumbled Friday amid a wave of “panic-selling” and concern that companies that had seen ballooning share prices recently are now overvalued. The BI Canada Cannabis Index plunged as much as 19 percent, its biggest intraday drop on record, while the nation’s largest producers including Canopy Growth Corp. and Aurora Cannabis Inc. tumbled more than 40 percent from their January highs.
However, five-year Canadas finished the day at 2.13%, up 5bp, which should be good news for FixedResets unless it isn’t.
Huffing and puffing over NAFTA continues:
Canadian Prime Minister Justin Trudeau made some of his most aggressive comments to date on dealing with U.S. demands to rework the North American Free Trade Agreement, adding he still thinks he can get the right deal for his country.
“We aren’t going to take any old deal,” Trudeau said Friday at a town hall in Nanaimo, British Columbia. “Canada is willing to walk away from Nafta if the United States proposes a bad deal. We won’t be pushed around.”
His comments come days after U.S. President Donald Trump threatened to get tough on trade, though he didn’t single out Nafta, in his State of the Union address. The latest round of Nafta talks wrapped up in Montreal on Monday, with all sides saying there had been progress, while acknowledging significant gaps remain on some issues.
I have decided that I’m a big Taylor Swift fan. She’s awesome. Just consider her latest achievement:
As she prepared to hit the road to support her latest album, Reputation, Swift and Ticketmaster Entertainment Inc. concocted a strategy to neuter the scalpers. They used Ticketmaster’s Verified Fan program, which utilizes in-house technology to identify actual fans and determine which of them should have access to fan-only presale tickets, based on their devotion to Swift as measured by their willingness to buy albums, sign up for a newsletter, and watch her music videos. While prices in the presale were fairly low for most people, Swift and promoter AEG Presents raised the cost of all the tickets in the later general sale to make them less attractive to scalpers.
Imagine that! The problem was scalpers taking too big a slice of the pie … so she raised prices for her shows to capture the increment for herself. It’s incredible! Conventional wisdom, of course, is to whine that the gubmint oughtta do sumpin, with ‘run crying to mommy’ running a close second … but my heroine Taylor Swift thinks way, way, way out of the box. I think she should get at least two Nobel Prizes in Economics for this breakthrough.
| 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 | -0.1839 % | 2,903.2 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.1839 % | 5,327.2 |
| Floater | 3.42 % | 3.59 % | 51,686 | 18.29 | 4 | -0.1839 % | 3,070.1 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.1089 % | 3,148.2 |
| SplitShare | 4.66 % | 4.29 % | 68,580 | 4.14 | 5 | -0.1089 % | 3,759.6 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.1089 % | 2,933.4 |
| Perpetual-Premium | 5.38 % | -0.16 % | 64,308 | 0.09 | 20 | -0.1339 % | 2,865.1 |
| Perpetual-Discount | 5.30 % | 5.29 % | 70,092 | 14.95 | 14 | -0.5490 % | 2,992.5 |
| FixedReset | 4.20 % | 4.46 % | 150,427 | 3.86 | 101 | -0.0876 % | 2,542.3 |
| Deemed-Retractible | 5.08 % | 5.49 % | 85,753 | 5.79 | 28 | -0.3504 % | 2,944.7 |
| FloatingReset | 3.02 % | 2.90 % | 43,985 | 3.76 | 10 | -0.2631 % | 2,779.3 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| BAM.PF.D | Perpetual-Discount | -2.11 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-02-02 Maturity Price : 21.92 Evaluated at bid price : 22.22 Bid-YTW : 5.57 % |
| BAM.PR.M | Perpetual-Discount | -1.45 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-02-02 Maturity Price : 21.45 Evaluated at bid price : 21.71 Bid-YTW : 5.53 % |
| SLF.PR.J | FloatingReset | -1.30 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 19.79 Bid-YTW : 6.37 % |
| IFC.PR.C | FixedReset | -1.20 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.81 Bid-YTW : 4.87 % |
| SLF.PR.B | Deemed-Retractible | -1.20 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.15 Bid-YTW : 6.24 % |
| MFC.PR.F | FixedReset | -1.18 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 19.18 Bid-YTW : 7.17 % |
| MFC.PR.L | FixedReset | -1.17 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.55 Bid-YTW : 5.29 % |
| BAM.PF.E | FixedReset | -1.08 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-02-02 Maturity Price : 23.08 Evaluated at bid price : 23.91 Bid-YTW : 4.82 % |
| BAM.PF.I | FixedReset | -1.00 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2022-03-31 Maturity Price : 25.00 Evaluated at bid price : 25.62 Bid-YTW : 4.28 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| TD.PR.Z | FloatingReset | 176,052 | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.82 Bid-YTW : 2.90 % |
| NA.PR.E | FixedReset | 158,970 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-02-02 Maturity Price : 23.07 Evaluated at bid price : 24.78 Bid-YTW : 4.61 % |
| BAM.PR.Z | FixedReset | 116,516 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-02-02 Maturity Price : 23.13 Evaluated at bid price : 24.88 Bid-YTW : 4.92 % |
| CM.PR.R | FixedReset | 112,947 | YTW SCENARIO Maturity Type : Call Maturity Date : 2022-07-31 Maturity Price : 25.00 Evaluated at bid price : 25.40 Bid-YTW : 4.04 % |
| BMO.PR.M | FixedReset | 88,972 | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.88 Bid-YTW : 3.78 % |
| TD.PF.A | FixedReset | 75,792 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-02-02 Maturity Price : 23.59 Evaluated at bid price : 23.96 Bid-YTW : 4.47 % |
| There were 49 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| BAM.PF.J | FixedReset | Quote: 25.05 – 25.59 Spot Rate : 0.5400 Average : 0.3703 YTW SCENARIO |
| MFC.PR.F | FixedReset | Quote: 19.18 – 19.71 Spot Rate : 0.5300 Average : 0.3760 YTW SCENARIO |
| BAM.PF.D | Perpetual-Discount | Quote: 22.22 – 22.66 Spot Rate : 0.4400 Average : 0.2993 YTW SCENARIO |
| GWO.PR.Q | Deemed-Retractible | Quote: 24.40 – 24.79 Spot Rate : 0.3900 Average : 0.2494 YTW SCENARIO |
| SLF.PR.B | Deemed-Retractible | Quote: 23.15 – 23.49 Spot Rate : 0.3400 Average : 0.2101 YTW SCENARIO |
| BAM.PF.I | FixedReset | Quote: 25.62 – 25.97 Spot Rate : 0.3500 Average : 0.2248 YTW SCENARIO |