The second quarter opened on a sour note:
The deepening rout in once high-flying technology shares sent U.S. stocks tumbling to start the second quarter, as fresh presidential criticism of Amazon.com and retaliatory tariffs from China rattled markets. Gold rose on haven demand.
…
Selling was heaviest in technology stocks. The Nasdaq 100 Index lost 2.9 percent as investors continued to offload some of the bull market’s biggest gainers. Amazon, up 50 percent in the past year, sank after Donald Trump renewed his attack on the online retailer. Netflix slid 5 percent, while chipmakers in the S&P 500 plunged 4.3 percent thanks to Intel’s worst day in two years. Bonds erased declines and gold spiked higher as the equity selling picked up steam.
…
The S&P 500 Index declined 2.2 percent as of 4 p.m. New York time.
…
The yield on 10-year Treasuries was little changed at 2.74 percent. The yield on two-year Treasuries fell two basis points to 2.25 percent.
Trump’s complaints about the “Amazon Washington Post” and his effects on the market look a lot like a precursor to crony capitalism:
Donald Trump has long bragged how his presidency has been a boon to the stock market. His recent attacks on Amazon.com Inc. are undermining that position.
…
The online retailer was the biggest drag on the equity benchmark Monday, a position its held for a week as it plunged 12 percent since Axios reported that the president was “obsessed” with regulating the company. That wiped about $75 billion from Amazon’s market capitalization.
…
Trump has unleashed a barrage of tweets accusing Amazon of not paying enough in taxes and underpaying the U.S. Postal Service.
As far as Amazon’s postal costs are concerned, I found this exposition illuminating:
The Postal Service is losing money, but its package delivery service is profitable, unlike its letter delivery.
The Postal Service is required by law to cover its costs for delivering competitive products, such as packages for Amazon. The Postal Regulatory Commission, which oversees the service, set the appropriate share of the costs of package delivery at 5.5% a little more than a decade ago.
Since then, the service’s delivery of packages has grown substantially, and the United Parcel Service argued in a submission to the commission in 2015 that a realistic appropriate share of costs for those deliveries should be about 24.6%.
A Citigroup analysis last year found that that difference would amount to about $1.46 per parcel, which might serve as the basis for Trump’s $1.50 figure. An op-ed penned in July by Josh Sandbulte in the Wall Street Journal cited that analysis in arguing the Postal Service’s estimate of costs for delivering packages should be revised. Sandbulte is co-president of Greenhaven Associates, a money management firm that owns FedEx common stock.
In response, US Postal Service executive Joseph Corbett wrote that the op-ed provided an “inaccurate and unfair account,” and that the Postal Regulatory Commission has determined each year that the service is covering its costs for package deliveries.
Corbett asserted the Postal Service’s financial insolvency is the result of its inability to overcome “systemic financial imbalances caused by legal and other constraints,” such as a price cap on revenue-producing products that doesn’t take changes in delivery volumes and costs into account.
The Postal Service’s biggest money problem is that it has billions in retirement obligations to its workers that it can’t afford.
But this could play out in Canada’s favour:
The Trump administration is pushing for a preliminary Nafta deal to announce at a summit in Peru next week, and will host cabinet ministers in Washington to try to achieve a breakthrough, according to three people familiar with the talks.
The White House wants leaders from Canada and Mexico to join in unveiling the broad outlines of an updated pact at the Summit of the Americas that begins April 13, while technical talks to hammer out the finer details and legal text could continue, according to the people. They asked not to be identified because the talks are private.
…
The three nations face a challenge to meet the U.S.’s goal because major divisions remain, including on the U.S. proposal for more North American content in automobiles. The White House declined to comment on plans to announce a deal for the North American Free Trade Agreement.America’s eagerness to strike a deal on its biggest trade pact comes as U.S. stocks tumbled, falling in seven of their last 10 trading sessions on concerns Trump’s protectionism could spark a trade war. The White House in the past month has imposed tariffs on steel and aluminum imports, and announced plans to slap duties on Chinese goods over alleged intellectual-property violations.
| 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 | -0.4989 % | 2,969.0 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.4989 % | 5,447.9 |
| Floater | 3.36 % | 3.56 % | 104,700 | 18.43 | 4 | -0.4989 % | 3,139.6 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0296 % | 3,159.6 |
| SplitShare | 4.56 % | 4.53 % | 81,822 | 5.15 | 4 | 0.0296 % | 3,773.3 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0296 % | 2,944.0 |
| Perpetual-Premium | 5.55 % | 0.74 % | 74,572 | 0.09 | 11 | 0.1327 % | 2,853.8 |
| Perpetual-Discount | 5.38 % | 5.44 % | 74,570 | 14.66 | 24 | -0.1052 % | 2,937.6 |
| FixedReset | 4.31 % | 4.62 % | 173,493 | 5.84 | 104 | -0.2998 % | 2,505.0 |
| Deemed-Retractible | 5.17 % | 5.82 % | 90,803 | 5.69 | 28 | -0.5689 % | 2,924.3 |
| FloatingReset | 2.98 % | 3.29 % | 33,864 | 3.63 | 11 | -0.8207 % | 2,733.3 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| TRP.PR.H | FloatingReset | -4.92 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-04-02 Maturity Price : 16.04 Evaluated at bid price : 16.04 Bid-YTW : 3.70 % |
| TRP.PR.F | FloatingReset | -4.28 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-04-02 Maturity Price : 19.47 Evaluated at bid price : 19.47 Bid-YTW : 3.87 % |
| GWO.PR.T | Deemed-Retractible | -3.98 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.62 Bid-YTW : 6.19 % |
| IFC.PR.E | Deemed-Retractible | -1.71 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.11 Bid-YTW : 5.88 % |
| GWO.PR.S | Deemed-Retractible | -1.57 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.40 Bid-YTW : 5.72 % |
| CU.PR.D | Perpetual-Discount | -1.48 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-04-02 Maturity Price : 23.00 Evaluated at bid price : 23.25 Bid-YTW : 5.32 % |
| TRP.PR.K | FixedReset | -1.46 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2022-05-31 Maturity Price : 25.00 Evaluated at bid price : 25.67 Bid-YTW : 4.34 % |
| SLF.PR.B | Deemed-Retractible | -1.37 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.35 Bid-YTW : 6.81 % |
| W.PR.J | Perpetual-Discount | -1.34 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-04-02 Maturity Price : 24.03 Evaluated at bid price : 24.28 Bid-YTW : 5.78 % |
| IFC.PR.A | FixedReset | -1.23 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 20.15 Bid-YTW : 7.15 % |
| GWO.PR.I | Deemed-Retractible | -1.16 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.25 Bid-YTW : 7.38 % |
| BAM.PR.T | FixedReset | -1.16 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-04-02 Maturity Price : 20.51 Evaluated at bid price : 20.51 Bid-YTW : 5.04 % |
| BNS.PR.F | FloatingReset | -1.15 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.63 Bid-YTW : 5.14 % |
| RY.PR.R | FixedReset | -1.13 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2021-08-24 Maturity Price : 25.00 Evaluated at bid price : 26.35 Bid-YTW : 4.00 % |
| SLF.PR.A | Deemed-Retractible | -1.11 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.24 Bid-YTW : 6.84 % |
| MFC.PR.H | FixedReset | -1.07 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.87 Bid-YTW : 5.26 % |
| TRP.PR.B | FixedReset | -1.06 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-04-02 Maturity Price : 16.75 Evaluated at bid price : 16.75 Bid-YTW : 4.70 % |
| CU.PR.F | Perpetual-Discount | -1.03 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-04-02 Maturity Price : 21.23 Evaluated at bid price : 21.23 Bid-YTW : 5.36 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| TD.PF.I | FixedReset | 155,700 | YTW SCENARIO Maturity Type : Call Maturity Date : 2022-10-31 Maturity Price : 25.00 Evaluated at bid price : 25.24 Bid-YTW : 4.48 % |
| BAM.PF.F | FixedReset | 75,193 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-04-02 Maturity Price : 23.65 Evaluated at bid price : 24.06 Bid-YTW : 5.01 % |
| TRP.PR.D | FixedReset | 44,900 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-04-02 Maturity Price : 21.69 Evaluated at bid price : 22.12 Bid-YTW : 4.88 % |
| BNS.PR.P | FixedReset | 35,600 | YTW SCENARIO Maturity Type : Call Maturity Date : 2018-05-25 Maturity Price : 25.00 Evaluated at bid price : 24.97 Bid-YTW : 2.61 % |
| TRP.PR.B | FixedReset | 31,800 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-04-02 Maturity Price : 16.75 Evaluated at bid price : 16.75 Bid-YTW : 4.70 % |
| MFC.PR.Q | FixedReset | 30,306 | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.07 Bid-YTW : 4.73 % |
| There were 11 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| GWO.PR.T | Deemed-Retractible | Quote: 23.62 – 24.50 Spot Rate : 0.8800 Average : 0.5139 YTW SCENARIO |
| TRP.PR.H | FloatingReset | Quote: 16.04 – 16.81 Spot Rate : 0.7700 Average : 0.4656 YTW SCENARIO |
| TRP.PR.F | FloatingReset | Quote: 19.47 – 20.24 Spot Rate : 0.7700 Average : 0.5806 YTW SCENARIO |
| W.PR.K | FixedReset | Quote: 25.74 – 26.35 Spot Rate : 0.6100 Average : 0.4403 YTW SCENARIO |
| BNS.PR.F | FloatingReset | Quote: 22.63 – 23.02 Spot Rate : 0.3900 Average : 0.2378 YTW SCENARIO |
| GWO.PR.S | Deemed-Retractible | Quote: 24.40 – 24.84 Spot Rate : 0.4400 Average : 0.3230 YTW SCENARIO |