Click for Big
TXPR closed at 598.47, down 0.63% on the day. Volume was 2.39-million, high but nothing special in the context of the past thirty days.
Click for Big
A mid-afternoon wave of selling changed a sub-par day into a bad one. Note that TXPR’s 52-week low is 596.56 – that’s not too far off!
CPD closed at 11.97, down 0.25% on the day. Volume of 351,301 was by far the highest of the past thirty days – second place belongs to May 13 with 168,630.
ZPR closed at 9.58, down 0.62% on the day, hitting a new 52-week low. Volume of 261,689 was the highest of the past thirty days, edging May 31 and its volume of 254,910
Five-year Canada yields were up 5bp to 1.34% today, but the increase didn’t help the Canadian preferred share market! Where are the GIC refugees?
Meanwhile, Powell suggested policy rates might ease:
The Federal Reserve chairman, Jerome H. Powell, said on Tuesday that the central bank was prepared to act to sustain the economic expansion if President Trump’s trade war weakened the economy. His remarks sent stocks soaring as investors predicted a cut in interest rates.
“We do not know how or when these issues will be resolved,” Mr. Powell said of the United States’ trade disputes with Mexico, China and other nations. “We are closely monitoring the implications of these developments for the U.S. economic outlook and, as always, we will act as appropriate to sustain the expansion, with a strong labor market and inflation near our symmetric 2 percent objective.”
Mr. Powell did not explicitly say that the Fed would cut interest rates, but his comments sent a signal that the central bank was watching Mr. Trump’s trade wars warily, ready to fend off any economic damage. While the Fed has been closely monitoring the effects of Mr. Trump’s trade war on the economy, Mr. Powell’s comments were his first since the president escalated his dispute by threatening tariffs on all Mexican goods.
…
The rebound in stock markets coaxed some investors out of the safety of government bonds, pushing prices down and yields — which move in the opposite direction — up. The rise in yields reversed some of a sharp decline in recent days that had reflected growing investor concern about the outlook for economic growth and inflation. The yield on the 10-year Treasury note was 2.12 percent at 3 p.m., according to Bloomberg data.But in signaling that it is prepared to limit economic damage from the trade war, the Fed could perpetuate the feedback loop that has developed among financial markets, the central bank and Mr. Trump — and could embolden the president to continue his fight.
Bullard of the St. Louis Fed said much the same thing yesterday.
However, Senate Republicans took up a collection today and were able to scrape together a pair of balls:
Mr. Trump’s latest threat — 5 percent tariffs on all goods imported from Mexico, rising to as high as 25 percent until the Mexican government stems the flow of migrants — has riled Republican senators who fear its impact on the economy and their home states. They emerged from a closed-door lunch in the Capitol angered by the briefing they received from a deputy White House counsel, Patrick F. Philbin, and Assistant Attorney General Steven A. Engel on the legal basis for imposing new tariffs by declaring a national emergency.
…
Senator Ron Johnson, Republican of Wisconsin, said he warned the lawyers that the Senate could muster an overwhelming majority to beat back the tariffs, even if Mr. Trump were to veto a resolution disapproving them. Republicans may be broadly supportive of Mr. Trump’s push to build a wall and secure the border, he said, but they are almost uniformly opposed to the imposition of tariffs on Mexico.
There was some good drone news today:
Shares of Drone Delivery Canada Corp. surged as much as 18 per cent in trading Tuesday after the company announced a 10-year contract with Air Canada that sees the cargo division of the country’s largest airline market and sell the Toronto-based company’s drone delivery services in Canada.
Analysts and investors say the agreement adds credibility to the pre-revenue startup company, known as DDC, which has developed a system for autonomous cargo delivery through unmanned aerial vehicles, known as drones.
I want to order pizza at 4am and I want to do it yesterday!
| 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 | 0.4025 % | 1,978.3 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.4025 % | 3,630.2 |
| Floater | 5.94 % | 6.38 % | 58,161 | 13.26 | 3 | 0.4025 % | 2,092.1 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0228 % | 3,301.6 |
| SplitShare | 4.72 % | 4.77 % | 77,489 | 4.26 | 7 | 0.0228 % | 3,942.8 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0228 % | 3,076.3 |
| Perpetual-Premium | 5.64 % | -3.91 % | 78,680 | 0.08 | 7 | -0.0169 % | 2,929.2 |
| Perpetual-Discount | 5.51 % | 5.57 % | 70,365 | 14.47 | 26 | -0.0743 % | 3,058.9 |
| FixedReset Disc | 5.56 % | 5.44 % | 170,684 | 14.68 | 70 | -0.7970 % | 2,047.0 |
| Deemed-Retractible | 5.32 % | 6.07 % | 95,225 | 8.06 | 27 | -0.2632 % | 3,050.1 |
| FloatingReset | 4.10 % | 4.88 % | 47,069 | 2.54 | 4 | -0.1189 % | 2,340.3 |
| FixedReset Prem | 5.17 % | 4.54 % | 224,302 | 1.88 | 16 | -0.1372 % | 2,549.2 |
| FixedReset Bank Non | 2.00 % | 4.56 % | 159,849 | 2.57 | 3 | -0.3372 % | 2,610.7 |
| FixedReset Ins Non | 5.35 % | 7.46 % | 102,842 | 8.18 | 22 | -0.7486 % | 2,128.7 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| MFC.PR.M | FixedReset Ins Non | -2.99 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 17.20 Bid-YTW : 8.17 % |
| EMA.PR.F | FixedReset Disc | -2.85 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-06-04 Maturity Price : 17.39 Evaluated at bid price : 17.39 Bid-YTW : 5.79 % |
| RY.PR.M | FixedReset Disc | -2.77 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-06-04 Maturity Price : 18.26 Evaluated at bid price : 18.26 Bid-YTW : 5.44 % |
| BAM.PF.G | FixedReset Disc | -2.32 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-06-04 Maturity Price : 16.81 Evaluated at bid price : 16.81 Bid-YTW : 6.40 % |
| BAM.PR.T | FixedReset Disc | -2.29 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-06-04 Maturity Price : 14.50 Evaluated at bid price : 14.50 Bid-YTW : 6.38 % |
| BMO.PR.Y | FixedReset Disc | -2.24 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-06-04 Maturity Price : 18.75 Evaluated at bid price : 18.75 Bid-YTW : 5.44 % |
| SLF.PR.H | FixedReset Ins Non | -2.20 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 15.56 Bid-YTW : 8.89 % |
| BMO.PR.C | FixedReset Disc | -2.14 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-06-04 Maturity Price : 21.54 Evaluated at bid price : 21.92 Bid-YTW : 5.32 % |
| SLF.PR.G | FixedReset Ins Non | -2.11 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 13.46 Bid-YTW : 9.77 % |
| BAM.PR.R | FixedReset Disc | -2.05 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-06-04 Maturity Price : 14.35 Evaluated at bid price : 14.35 Bid-YTW : 6.33 % |
| CU.PR.C | FixedReset Disc | -2.05 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-06-04 Maturity Price : 16.75 Evaluated at bid price : 16.75 Bid-YTW : 5.55 % |
| BAM.PR.Z | FixedReset Disc | -1.94 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-06-04 Maturity Price : 18.17 Evaluated at bid price : 18.17 Bid-YTW : 6.17 % |
| BIP.PR.A | FixedReset Disc | -1.86 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-06-04 Maturity Price : 18.50 Evaluated at bid price : 18.50 Bid-YTW : 6.62 % |
| MFC.PR.L | FixedReset Ins Non | -1.73 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 16.51 Bid-YTW : 8.42 % |
| TRP.PR.E | FixedReset Disc | -1.60 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-06-04 Maturity Price : 16.00 Evaluated at bid price : 16.00 Bid-YTW : 5.88 % |
| TD.PF.E | FixedReset Disc | -1.59 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-06-04 Maturity Price : 19.77 Evaluated at bid price : 19.77 Bid-YTW : 5.34 % |
| BAM.PF.B | FixedReset Disc | -1.58 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-06-04 Maturity Price : 17.41 Evaluated at bid price : 17.41 Bid-YTW : 6.04 % |
| BAM.PR.X | FixedReset Disc | -1.46 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-06-04 Maturity Price : 12.85 Evaluated at bid price : 12.85 Bid-YTW : 6.09 % |
| CM.PR.Q | FixedReset Disc | -1.44 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-06-04 Maturity Price : 18.51 Evaluated at bid price : 18.51 Bid-YTW : 5.61 % |
| BIP.PR.C | FixedReset Disc | -1.42 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-06-04 Maturity Price : 23.23 Evaluated at bid price : 24.30 Bid-YTW : 6.03 % |
| TD.PF.D | FixedReset Disc | -1.41 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-06-04 Maturity Price : 19.55 Evaluated at bid price : 19.55 Bid-YTW : 5.31 % |
| TRP.PR.G | FixedReset Disc | -1.38 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-06-04 Maturity Price : 17.85 Evaluated at bid price : 17.85 Bid-YTW : 6.02 % |
| SLF.PR.I | FixedReset Ins Non | -1.32 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 18.70 Bid-YTW : 7.46 % |
| SLF.PR.C | Deemed-Retractible | -1.32 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 20.26 Bid-YTW : 7.00 % |
| RY.PR.J | FixedReset Disc | -1.30 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-06-04 Maturity Price : 18.95 Evaluated at bid price : 18.95 Bid-YTW : 5.41 % |
| BAM.PF.E | FixedReset Disc | -1.24 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-06-04 Maturity Price : 15.95 Evaluated at bid price : 15.95 Bid-YTW : 6.28 % |
| MFC.PR.N | FixedReset Ins Non | -1.17 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 16.85 Bid-YTW : 8.36 % |
| TRP.PR.K | FixedReset Disc | -1.16 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-06-04 Maturity Price : 23.24 Evaluated at bid price : 24.61 Bid-YTW : 5.19 % |
| GWO.PR.N | FixedReset Ins Non | -1.15 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 13.70 Bid-YTW : 9.34 % |
| BAM.PF.J | FixedReset Disc | -1.12 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-06-04 Maturity Price : 21.82 Evaluated at bid price : 22.15 Bid-YTW : 5.44 % |
| IAF.PR.B | Deemed-Retractible | -1.11 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.31 Bid-YTW : 6.54 % |
| TRP.PR.A | FixedReset Disc | -1.10 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-06-04 Maturity Price : 13.52 Evaluated at bid price : 13.52 Bid-YTW : 6.06 % |
| MFC.PR.G | FixedReset Ins Non | -1.09 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 18.99 Bid-YTW : 7.47 % |
| BMO.PR.S | FixedReset Disc | -1.08 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-06-04 Maturity Price : 17.47 Evaluated at bid price : 17.47 Bid-YTW : 5.31 % |
| TRP.PR.C | FixedReset Disc | -1.04 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-06-04 Maturity Price : 12.33 Evaluated at bid price : 12.33 Bid-YTW : 5.81 % |
| POW.PR.A | Perpetual-Discount | -1.01 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-06-04 Maturity Price : 24.29 Evaluated at bid price : 24.60 Bid-YTW : 5.77 % |
| CM.PR.O | FixedReset Disc | 1.03 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-06-04 Maturity Price : 16.68 Evaluated at bid price : 16.68 Bid-YTW : 5.58 % |
| TD.PF.B | FixedReset Disc | 1.06 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-06-04 Maturity Price : 17.20 Evaluated at bid price : 17.20 Bid-YTW : 5.34 % |
| POW.PR.B | Perpetual-Discount | 1.27 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-06-04 Maturity Price : 23.59 Evaluated at bid price : 23.86 Bid-YTW : 5.68 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| CM.PR.Y | FixedReset Disc | 1,022,019 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-06-04 Maturity Price : 22.92 Evaluated at bid price : 24.37 Bid-YTW : 5.10 % |
| TD.PF.M | FixedReset Disc | 680,093 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-06-04 Maturity Price : 23.05 Evaluated at bid price : 24.70 Bid-YTW : 4.96 % |
| HSE.PR.A | FixedReset Disc | 129,900 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-06-04 Maturity Price : 12.30 Evaluated at bid price : 12.30 Bid-YTW : 6.20 % |
| SLF.PR.A | Deemed-Retractible | 88,100 | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.51 Bid-YTW : 6.59 % |
| BAM.PR.K | Floater | 72,600 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-06-04 Maturity Price : 11.03 Evaluated at bid price : 11.03 Bid-YTW : 6.39 % |
| RY.PR.Z | FixedReset Disc | 47,617 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-06-04 Maturity Price : 17.74 Evaluated at bid price : 17.74 Bid-YTW : 5.06 % |
| There were 49 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| MFC.PR.M | FixedReset Ins Non | Quote: 17.20 – 17.74 Spot Rate : 0.5400 Average : 0.3557 YTW SCENARIO |
| BAM.PR.Z | FixedReset Disc | Quote: 18.17 – 18.74 Spot Rate : 0.5700 Average : 0.3995 YTW SCENARIO |
| SLF.PR.H | FixedReset Ins Non | Quote: 15.56 – 15.98 Spot Rate : 0.4200 Average : 0.2860 YTW SCENARIO |
| BAM.PR.T | FixedReset Disc | Quote: 14.50 – 14.89 Spot Rate : 0.3900 Average : 0.2585 YTW SCENARIO |
| EMA.PR.F | FixedReset Disc | Quote: 17.39 – 17.90 Spot Rate : 0.5100 Average : 0.3898 YTW SCENARIO |
| TRP.PR.K | FixedReset Disc | Quote: 24.61 – 24.89 Spot Rate : 0.2800 Average : 0.1645 YTW SCENARIO |
Just a clarification on the US Federal Reserve’s REAL Dual Mandate:
1-Annihalate the US Middle Class
2- Force them into risky assets by starving them for yield and then steal everything they have.
Ten years after the US Congress enacted financial crises and zero percent interest rates or negative interest rates around the world what have any of these policies produced but suffering for everyone but the criminal elite.
I’ve never seen sheep so complacent about their impending doom.
“Senate Republicans took up a collection today and were able to scrape together a pair of balls”
Laugh out loud! Great line, James.
coolmesh says .. you comment ” I’ve never seen sheep so complacent about their impending doom.” and what do you suggest we sheep do ???????
The more pertinent question is:
Is the entire developed world turning Japanese?
If yes, then we’ll see a repetition of previous decade- close to zero interest rates with feeble attempts at normalization. Like the three attempts by the Fed to normalize interest rates in last decade have gone in vain.
First, it was the taper tantrum. It created a huge shock in the bond market, but ultimately did not much damage.
Then the Yellen attempts at normalization during 2015 which led to the 2016 crash in oil and stock markets.
Finally, Mr. Powell tried normalization of interest rates and balance sheet reduction. That was met with the Dec 2018 sell off and the beginning of steep yield curve inversions.
The best case scenario is that central banks do more jawboning or cut rates, economy recovers a bit, they try to normalize again and then markets fall again.
Almost a Sisyphean task.
Until something breaks and this cycle can’t be repeated. Not sure how many times and for how long can this go on. But the Japanese are still at it after 30 years.
Bank of Canada has had almost similar trajectory. First the rate cuts of 2008/9, followed by rapid rate hikes by Mr. Carney in 2010. Then period of lull followed by two cuts by Mr. Poloz in 2016, followed by several hikes in 2017/18.
Is Mr. Poloz going to follow the Fed?
My suspicion is that he will be forced to do that or see a rapidly rising loonie that will dissipate the Canadian export edge.
As investors in an asset class driven majorly by interest rates, we must at least seriously consider the possibility of low interest rates for a long period of time.
skeptical says: , yup , i think lower for longer than any one thinks , maybe negative , which should make the good div payers and prefs the place to be . i keep buying , they keep dropping , i keep buying .