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TXPR closed at 581.28, up 0.58% on the day. Volume today was 1.70-million, below the median of the past thirty days.
CPD closed at 11.58, up 0.43% on the day. Volume was 149,441, near the median of the past 30 trading days.
ZPR closed at 9.11, up 0.11% on the day. Volume of 104,897, well below the median of the past 30 trading days.
Five-year Canada yields were unchanged at 0.38% today.
The FOMC Statement had no surprises:
The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals.
The COVID-19 pandemic is causing tremendous human and economic hardship across the United States and around the world. Economic activity and employment have continued to recover but remain well below their levels at the beginning of the year. Weaker demand and earlier declines in oil prices have been holding down consumer price inflation. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses.
The path of the economy will depend significantly on the course of the virus. The ongoing public health crisis will continue to weigh on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term.
The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With inflation running persistently below this longer-run goal, the Committee will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer-term inflation expectations remain well anchored at 2 percent. The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved. The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee’s assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time. In addition, over coming months the Federal Reserve will increase its holdings of Treasury securities and agency mortgage-backed securities at least at the current pace to sustain smooth market functioning and help foster accommodative financial conditions, thereby supporting the flow of credit to households and businesses.
In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. The Committee’s assessments will take into account a wide range of information, including readings on public health, labor market conditions, inflation pressures and inflation expectations, and financial and international developments.
Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Mary C. Daly; Patrick Harker; Robert S. Kaplan; Loretta J. Mester; and Randal K. Quarles. Ms. Daly voted as an alternate member at this meeting.
Mr. Powell said the two biggest economic risks right now are the “further spread of the disease” and the likelihood that households will “run through the savings” they were able to accumulate as a result of government spending early in the pandemic, including stimulus checks and enhanced unemployment benefits.
While the Fed is prepared to act as needed to support the recovery, Mr. Powell once again said more fiscal support will be needed to help mitigate those risks.
“We can obviously support financial stability through our lending programs,” he said. “We’ll have a stronger recovery if we can get at least some more fiscal support, when it’s appropriate and at the size Congress thinks is appropriate.”
Ontario plans to (gasp!) balance the budget someday:
Ontario budget highlights:
- Ontario’s budget includes an unprecedented deficit of $38.5-billion this year, followed by $33.1-billion in 2021-22 and $28.2-billion in 2022-23;
- The government has put off its requirement for a plan to balance its books, says it will present a path to balance in a spring budget;
- To fight COVID-19, the budget includes $7.5-billion in new spending on the health sector over the next 3 years;
- The government will subsidize hydro rates for large and medium-sized business, cutting their power costs by 14 to 16 per cent;
- New seniors home tax credit for 25 per cent on renovations to help them stay in their homes;
- A commitment to develop an Ontario “staycation” 20-per-cent rebate on tourism expenses to encourage local travel in the province;
- No specific funds are dedicated to a new promise to fund an average four hours a day of direct care in long-term care homes over the next four years;
There is, of course, no mention of actually paying back the borrowed funds. The plan, so far as I can tell, is to get back to the fiscal environment of the early nineties, when interest payments comprised 35%-odd of government budgets. Pay $1 in taxes, get $0.65 in services! That’s good enough for today’s kids. If they had really wanted to get $1 in services for $1 in taxes, they would have been born in an earlier generation. Losers.
| 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 | 2.8465 % | 1,649.2 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 2.8465 % | 3,026.2 |
| Floater | 5.16 % | 5.22 % | 42,263 | 15.09 | 3 | 2.8465 % | 1,744.0 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0446 % | 3,532.7 |
| SplitShare | 4.80 % | 4.74 % | 43,183 | 3.51 | 8 | 0.0446 % | 4,218.8 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0446 % | 3,291.6 |
| Perpetual-Premium | 5.35 % | 2.90 % | 84,879 | 0.31 | 14 | 0.0783 % | 3,182.1 |
| Perpetual-Discount | 5.19 % | 5.17 % | 86,886 | 15.17 | 19 | 0.3506 % | 3,571.5 |
| FixedReset Disc | 5.45 % | 4.16 % | 130,099 | 16.56 | 64 | 0.7589 % | 2,124.6 |
| Insurance Straight | 5.09 % | 4.93 % | 111,146 | 15.15 | 22 | 0.2770 % | 3,486.4 |
| FloatingReset | 1.97 % | 2.33 % | 50,816 | 1.22 | 3 | 0.0673 % | 1,800.4 |
| FixedReset Prem | 5.22 % | 3.18 % | 240,218 | 0.76 | 15 | 0.0976 % | 2,651.7 |
| FixedReset Bank Non | 1.94 % | 2.00 % | 185,183 | 1.22 | 2 | -0.1004 % | 2,864.8 |
| FixedReset Ins Non | 5.50 % | 4.27 % | 71,359 | 16.37 | 22 | -0.1871 % | 2,196.3 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| IFC.PR.G | FixedReset Ins Non | -5.03 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 17.01 Evaluated at bid price : 17.01 Bid-YTW : 4.81 % |
| MFC.PR.R | FixedReset Ins Non | -2.80 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 23.89 Evaluated at bid price : 24.30 Bid-YTW : 4.42 % |
| IFC.PR.A | FixedReset Ins Non | -1.56 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 12.65 Evaluated at bid price : 12.65 Bid-YTW : 4.56 % |
| GWO.PR.N | FixedReset Ins Non | -1.49 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 9.95 Evaluated at bid price : 9.95 Bid-YTW : 4.31 % |
| MFC.PR.J | FixedReset Ins Non | 1.00 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 19.10 Evaluated at bid price : 19.10 Bid-YTW : 4.27 % |
| CU.PR.G | Perpetual-Discount | 1.04 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 22.99 Evaluated at bid price : 23.39 Bid-YTW : 4.79 % |
| BIP.PR.B | FixedReset Disc | 1.04 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 23.19 Evaluated at bid price : 24.30 Bid-YTW : 5.68 % |
| SLF.PR.E | Insurance Straight | 1.06 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 23.63 Evaluated at bid price : 23.90 Bid-YTW : 4.75 % |
| RY.PR.P | Perpetual-Premium | 1.14 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2021-02-24 Maturity Price : 26.00 Evaluated at bid price : 26.70 Bid-YTW : -4.53 % |
| BIP.PR.F | FixedReset Disc | 1.14 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 21.85 Evaluated at bid price : 22.15 Bid-YTW : 5.82 % |
| TD.PF.E | FixedReset Disc | 1.14 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 20.35 Evaluated at bid price : 20.35 Bid-YTW : 4.03 % |
| TRP.PR.D | FixedReset Disc | 1.15 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 13.15 Evaluated at bid price : 13.15 Bid-YTW : 5.76 % |
| SLF.PR.C | Insurance Straight | 1.17 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 23.16 Evaluated at bid price : 23.42 Bid-YTW : 4.79 % |
| BIP.PR.A | FixedReset Disc | 1.19 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 17.01 Evaluated at bid price : 17.01 Bid-YTW : 5.90 % |
| CM.PR.O | FixedReset Disc | 1.22 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 17.47 Evaluated at bid price : 17.47 Bid-YTW : 4.20 % |
| CM.PR.P | FixedReset Disc | 1.28 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 18.25 Evaluated at bid price : 18.25 Bid-YTW : 4.02 % |
| SLF.PR.D | Insurance Straight | 1.30 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 23.14 Evaluated at bid price : 23.40 Bid-YTW : 4.80 % |
| BMO.PR.D | FixedReset Disc | 1.32 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 22.64 Evaluated at bid price : 23.00 Bid-YTW : 3.93 % |
| CU.PR.C | FixedReset Disc | 1.33 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 16.70 Evaluated at bid price : 16.70 Bid-YTW : 4.25 % |
| CM.PR.S | FixedReset Disc | 1.35 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 18.75 Evaluated at bid price : 18.75 Bid-YTW : 4.09 % |
| TD.PF.B | FixedReset Disc | 1.36 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 17.85 Evaluated at bid price : 17.85 Bid-YTW : 4.01 % |
| SLF.PR.G | FixedReset Ins Non | 1.38 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 11.00 Evaluated at bid price : 11.00 Bid-YTW : 4.15 % |
| BAM.PR.X | FixedReset Disc | 1.40 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 10.85 Evaluated at bid price : 10.85 Bid-YTW : 5.23 % |
| BMO.PR.T | FixedReset Disc | 1.47 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 17.30 Evaluated at bid price : 17.30 Bid-YTW : 4.08 % |
| CU.PR.F | Perpetual-Discount | 1.66 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 23.57 Evaluated at bid price : 23.85 Bid-YTW : 4.71 % |
| NA.PR.G | FixedReset Disc | 1.67 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 20.05 Evaluated at bid price : 20.05 Bid-YTW : 4.31 % |
| TRP.PR.C | FixedReset Disc | 1.70 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 8.98 Evaluated at bid price : 8.98 Bid-YTW : 5.41 % |
| NA.PR.E | FixedReset Disc | 1.79 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 18.75 Evaluated at bid price : 18.75 Bid-YTW : 4.26 % |
| TD.PF.C | FixedReset Disc | 1.92 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 18.55 Evaluated at bid price : 18.55 Bid-YTW : 3.93 % |
| BAM.PR.Z | FixedReset Disc | 1.99 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 16.88 Evaluated at bid price : 16.88 Bid-YTW : 5.31 % |
| NA.PR.S | FixedReset Disc | 2.01 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 17.75 Evaluated at bid price : 17.75 Bid-YTW : 4.26 % |
| BAM.PR.K | Floater | 2.10 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 8.27 Evaluated at bid price : 8.27 Bid-YTW : 5.25 % |
| TD.PF.D | FixedReset Disc | 2.15 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 19.95 Evaluated at bid price : 19.95 Bid-YTW : 4.01 % |
| TD.PF.I | FixedReset Disc | 2.17 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 22.32 Evaluated at bid price : 22.63 Bid-YTW : 3.87 % |
| BAM.PR.B | Floater | 2.58 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 8.35 Evaluated at bid price : 8.35 Bid-YTW : 5.19 % |
| IFC.PR.C | FixedReset Ins Non | 2.69 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 17.20 Evaluated at bid price : 17.20 Bid-YTW : 4.50 % |
| BAM.PR.R | FixedReset Disc | 3.15 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 13.10 Evaluated at bid price : 13.10 Bid-YTW : 5.22 % |
| BAM.PR.C | Floater | 3.88 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 8.31 Evaluated at bid price : 8.31 Bid-YTW : 5.22 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| RY.PR.M | FixedReset Disc | 99,000 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 18.61 Evaluated at bid price : 18.61 Bid-YTW : 4.05 % |
| SLF.PR.E | Insurance Straight | 85,316 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 23.63 Evaluated at bid price : 23.90 Bid-YTW : 4.75 % |
| SLF.PR.A | Insurance Straight | 65,300 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 24.14 Evaluated at bid price : 24.39 Bid-YTW : 4.91 % |
| CU.PR.I | FixedReset Prem | 62,700 | YTW SCENARIO Maturity Type : Call Maturity Date : 2020-12-31 Maturity Price : 25.00 Evaluated at bid price : 25.20 Bid-YTW : -2.77 % |
| TD.PF.A | FixedReset Disc | 51,216 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 17.86 Evaluated at bid price : 17.86 Bid-YTW : 3.99 % |
| BMO.PR.Y | FixedReset Disc | 50,900 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2050-11-05 Maturity Price : 19.40 Evaluated at bid price : 19.40 Bid-YTW : 3.99 % |
| There were 24 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| IFC.PR.G | FixedReset Ins Non | Quote: 17.01 – 18.00 Spot Rate : 0.9900 Average : 0.5974 YTW SCENARIO |
| MFC.PR.M | FixedReset Ins Non | Quote: 17.85 – 18.85 Spot Rate : 1.0000 Average : 0.6323 YTW SCENARIO |
| MFC.PR.R | FixedReset Ins Non | Quote: 24.30 – 25.00 Spot Rate : 0.7000 Average : 0.3900 YTW SCENARIO |
| CIU.PR.A | Perpetual-Discount | Quote: 22.88 – 23.83 Spot Rate : 0.9500 Average : 0.6593 YTW SCENARIO |
| MFC.PR.H | FixedReset Ins Non | Quote: 21.00 – 21.76 Spot Rate : 0.7600 Average : 0.5194 YTW SCENARIO |
| SLF.PR.D | Insurance Straight | Quote: 23.40 – 23.99 Spot Rate : 0.5900 Average : 0.3937 YTW SCENARIO |
Actually the earlier generation got $1.25 in services for $1 in taxes, after all it had to run up the deficit in the first place…
Any comment on BCE’s market notice to purchase up to 10% of o/s preferreds?
I was too early (last autumn) in calling for an eventual collapse in the seniority spread due to all the market repurchases. A small virus got in the way. I still suspect that this is the eventual outcome.
Actually the earlier generation got $1.25 in services for $1 in taxes, after all it had to run up the deficit in the first place…
Quite true!
Any comment on BCE’s market notice to purchase up to 10% of o/s preferreds?
Here’s the press release. The interesting part is:
The quote paragraph suggests that this notice of intention is more serious than most, but I hesitate to make a big deal of the announcement because most NCIBs are merely public relations exercises. When a company actually follows through, then it becomes news; I’ll wait until I see the colour of BCE’s money.
Yep, buy the shares up at MKT, not the $25 they should be.
Hence why we (preferred share holders) probably won’t see $25 on any of these until interest rates turn big time… Or they buy up so many shares that it costs them more money to keep the stock listed than to pay us out…. So far I haven’t heard any company doing that (other than Lowes buyout of Rona)
In line with James’ comment: Don’t count your chickens before they hatch. In the same press release, BCE revealed that there had been ZERO purchases in the previous 12 month period of the expiring NCIB. Of the various NCIBs that are annually renewed, I believe that only the Brookfield entities actually purchase and cancel a portion of their outstanding prefs in accordance with the annual entitlement. Correct me if I’m wrong!