There was good news from Canadian inflation:
The Consumer Price Index (CPI) rose 4.3 per cent in March from a year earlier, down from February’s 5.2-per-cent pace, Statistics Canada reported on Tuesday. The slowdown was widely anticipated and matched financial analysts’ predictions.
…
Even so, the short-term trend has noticeably cooled off. Expressed at an annualized rate, the three-month change in core inflation (excluding food and energy) was 3.1 per cent in March, down from 3.4 per cent in February. It had peaked at more than 8 per cent in May, 2022.
…
Gasoline prices fell nearly 14 per cent over the past year, although they were up 1.2 per cent from February. The price of durable goods rose 1.6 per cent in March on a 12-month basis, slowing from a 3.4-per-cent gain in February.There have also been slight improvements in the grocery sector: Those prices rose 9.7 per cent over the past year, down from increases of more than 11 per cent in recent months.
On the flip side, mortgage interest costs have surged by 26.4 per cent over the past year, rising from February’s gain of nearly 24 per cent. “This was the largest yearly increase on record as Canadians continued to renew and initiate mortgages at higher interest rates,” Statscan said in its release. Excluding these costs, the CPI rose 3.6 per cent over the past 12 months.
The New York Fed released its Business Leaders Survey:
Activity in the region’s service sector continued to decline modestly, according to firms responding to the Federal Reserve Bank of New York’s April 2023 Business Leaders Survey. The survey’s headline business activity index was little changed at -9.8. The business climate index moved down nine points to -47.7, suggesting the business climate remains much worse than normal. Employment levels were unchanged, representing the first time in two years that employment has not increased. Wage increases moderated noticeably, and input and selling price increases slowed. Looking ahead, firms do not expect conditions to improve over the next six months.
The Bridging Finance story is getting even more interesting:
In a lawsuit filed with the Ontario Superior Court, PricewaterhouseCoopers Inc., the receiver, alleges that “throughout KPMG’s tenure, the Bridging funds materially misrepresented the value of their assets and financial performance. KPMG negligently failed to detect and report on these misstatements.”
…
Early last year, PwC estimated that investors will lose $1.3-billion, meaning almost two-thirds of Bridging’s $2.09-billion in assets under management have vanished – one of the largest collapses of an investment manager in Canadian history.PwC increased that estimate to $1.4-billion in its new lawsuit, and it blames KPMG. ”The Bridging funds are insolvent, and KPMG is liable for the liquidation deficit.” PwC argues the shortfall “would have been avoided if KPMG had conducted the audit competently and in accordance with applicable standards.”
OSFI has released its Annual Risk Outlook for 2023-2024:
Today, the Office of the Superintendent of Financial Institutions (OSFI) released its Annual Risk Outlook (ARO) for 2023-24, a publication that outlines what OSFI sees as the most significant risks facing Canada’s financial system in the upcoming year. The ARO also informs Canadians about the actions OSFI will take in response to these risks.
OSFI’s Annual Risk Outlook for 2023-24 identifies the following key risks:
- Housing Market Downturn Risk
- Liquidity and Funding Risk
- Commercial Real Estate (CRE) Risk
- Transmission Risk from the Non-bank Financial Intermediaries (NBFI) sector
- Corporate and Commercial Credit Risk
- Digital Innovation Risk
- Climate Risk
- Cyber Risk
- Third Party Risk
As the risk environment that Canadian financial institutions operate in changes, OSFI will be reliably open and transparent about the supervisory and regulatory actions it takes in response.
A download is available from the press release page.
And, it’s been a long time, but there can be penalties for deliberate lies:
The judge in the Fox News defamation case said on Tuesday that the case was resolved, abruptly ending a long-running dispute over misinformation in the 2020 election just as a highly anticipated trial was about to begin.
It was a last-minute end to a case that began two years ago and after the disclosure of hundreds of thousands of pages of documents that peeled back the curtain on a media company that has long resisted outside scrutiny. The settlement included a $787.5 million payment from Fox, according to Justin Nelson, a lawyer for Dominion.
…
Another election technology company, Smartmatic, filed a $2.7 billion defamation lawsuit against Fox in February 2021, accusing the news network of falsely implicating the company in a bogus narrative about vote rigging in the 2020 election.“Dominion’s litigation exposed some of the misconduct and damage caused by Fox’s disinformation campaign,” a Smartmatic spokesman said in a statement on Tuesday. “Smartmatic will expose the rest.”
Smartmatic said in its complaint that Fox knowingly aired more than 100 false statements. A day after the suit was filed, Fox Business canceled the show of Lou Dobbs, who was named as a defendant.
There was an interesting post on Financial Wisdom Forum today:
I have in mind to add one or two perpetuals to our portfolio. There are quite a number of choices. I decided to only look at those with P1 credit ratings. Question is how to choose between shares with similar yields? My gut feel is to buy those with lower price and coupon rate. Interested in any comments.
Just for fun, I asked Bing and ChatGPT. Bing never seemed to understand question and kept telling me to sort on credit rating (they were the same!). ChatGPT gave a very comprehensive answer. More or less confirmed my feeling, but did encourage me to go look at the prospectus! (I will, once I have a short list)
This is the up to date list sorted and extracted from my Google Sheets spreadsheet:
He makes a transcript of the ChatGPT interaction in a later post. The machine did a pretty good job!
| 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 | -0.4977 % | 2,305.5 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.4977 % | 4,422.0 |
| Floater | 9.77 % | 9.91 % | 39,435 | 9.61 | 2 | -0.4977 % | 2,548.4 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1222 % | 3,360.3 |
| SplitShare | 5.00 % | 7.29 % | 44,817 | 2.62 | 7 | 0.1222 % | 4,012.9 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1222 % | 3,131.1 |
| Perpetual-Premium | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1546 % | 2,769.2 |
| Perpetual-Discount | 6.16 % | 6.22 % | 52,554 | 13.57 | 34 | 0.1546 % | 3,019.6 |
| FixedReset Disc | 5.73 % | 7.71 % | 85,122 | 11.96 | 63 | 0.2656 % | 2,155.5 |
| Insurance Straight | 6.05 % | 6.14 % | 72,204 | 13.71 | 19 | 0.0874 % | 2,971.3 |
| FloatingReset | 10.43 % | 10.94 % | 42,718 | 8.84 | 2 | 0.1020 % | 2,390.3 |
| FixedReset Prem | 6.90 % | 6.49 % | 327,091 | 3.92 | 1 | 0.1969 % | 2,341.2 |
| FixedReset Bank Non | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.2656 % | 2,203.3 |
| FixedReset Ins Non | 6.03 % | 7.63 % | 66,621 | 11.80 | 11 | 0.2190 % | 2,313.4 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| BIP.PR.F | FixedReset Disc | -3.11 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-04-18 Maturity Price : 19.01 Evaluated at bid price : 19.01 Bid-YTW : 8.18 % |
| BN.PR.T | FixedReset Disc | -1.42 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-04-18 Maturity Price : 13.90 Evaluated at bid price : 13.90 Bid-YTW : 9.21 % |
| TRP.PR.A | FixedReset Disc | -1.36 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-04-18 Maturity Price : 13.80 Evaluated at bid price : 13.80 Bid-YTW : 9.11 % |
| BN.PR.B | Floater | -1.16 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-04-18 Maturity Price : 11.96 Evaluated at bid price : 11.96 Bid-YTW : 9.97 % |
| BN.PR.X | FixedReset Disc | -1.08 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-04-18 Maturity Price : 14.65 Evaluated at bid price : 14.65 Bid-YTW : 8.52 % |
| CM.PR.Y | FixedReset Disc | 1.07 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-04-18 Maturity Price : 23.22 Evaluated at bid price : 23.70 Bid-YTW : 7.11 % |
| MIC.PR.A | Perpetual-Discount | 1.07 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-04-18 Maturity Price : 20.72 Evaluated at bid price : 20.72 Bid-YTW : 6.59 % |
| NA.PR.E | FixedReset Disc | 1.18 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-04-18 Maturity Price : 20.56 Evaluated at bid price : 20.56 Bid-YTW : 7.12 % |
| BMO.PR.T | FixedReset Disc | 1.23 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-04-18 Maturity Price : 17.34 Evaluated at bid price : 17.34 Bid-YTW : 7.82 % |
| BNS.PR.I | FixedReset Disc | 1.23 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-04-18 Maturity Price : 20.60 Evaluated at bid price : 20.60 Bid-YTW : 6.91 % |
| CM.PR.P | FixedReset Disc | 1.29 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-04-18 Maturity Price : 17.23 Evaluated at bid price : 17.23 Bid-YTW : 7.71 % |
| NA.PR.W | FixedReset Disc | 1.58 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-04-18 Maturity Price : 16.76 Evaluated at bid price : 16.76 Bid-YTW : 7.94 % |
| FTS.PR.H | FixedReset Disc | 1.61 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-04-18 Maturity Price : 12.60 Evaluated at bid price : 12.60 Bid-YTW : 8.57 % |
| PWF.PF.A | Perpetual-Discount | 1.97 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-04-18 Maturity Price : 18.66 Evaluated at bid price : 18.66 Bid-YTW : 6.06 % |
| PVS.PR.K | SplitShare | 2.20 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2029-05-31 Maturity Price : 25.00 Evaluated at bid price : 22.30 Bid-YTW : 6.77 % |
| BN.PF.B | FixedReset Disc | 2.24 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-04-18 Maturity Price : 16.41 Evaluated at bid price : 16.41 Bid-YTW : 8.96 % |
| BIP.PR.B | FixedReset Disc | 3.19 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-04-18 Maturity Price : 21.38 Evaluated at bid price : 21.70 Bid-YTW : 8.55 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| TD.PF.D | FixedReset Disc | 33,010 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-04-18 Maturity Price : 18.36 Evaluated at bid price : 18.36 Bid-YTW : 7.61 % |
| NA.PR.C | FixedReset Prem | 28,800 | YTW SCENARIO Maturity Type : Call Maturity Date : 2027-11-15 Maturity Price : 25.00 Evaluated at bid price : 25.45 Bid-YTW : 6.49 % |
| BN.PR.B | Floater | 28,350 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-04-18 Maturity Price : 11.96 Evaluated at bid price : 11.96 Bid-YTW : 9.97 % |
| MFC.PR.J | FixedReset Ins Non | 21,900 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-04-18 Maturity Price : 21.57 Evaluated at bid price : 21.90 Bid-YTW : 6.89 % |
| TD.PF.B | FixedReset Disc | 18,810 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-04-18 Maturity Price : 17.17 Evaluated at bid price : 17.17 Bid-YTW : 7.83 % |
| NA.PR.E | FixedReset Disc | 18,785 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-04-18 Maturity Price : 20.56 Evaluated at bid price : 20.56 Bid-YTW : 7.12 % |
| There were 4 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| BMO.PR.T | FixedReset Disc | Quote: 17.34 – 23.47 Spot Rate : 6.1300 Average : 3.2812 YTW SCENARIO |
| TD.PF.D | FixedReset Disc | Quote: 18.36 – 19.70 Spot Rate : 1.3400 Average : 0.7955 YTW SCENARIO |
| BIP.PR.F | FixedReset Disc | Quote: 19.01 – 19.90 Spot Rate : 0.8900 Average : 0.4923 YTW SCENARIO |
| CU.PR.E | Perpetual-Discount | Quote: 20.09 – 20.54 Spot Rate : 0.4500 Average : 0.2866 YTW SCENARIO |
| PWF.PR.G | Perpetual-Discount | Quote: 23.35 – 23.92 Spot Rate : 0.5700 Average : 0.4222 YTW SCENARIO |
| BN.PF.H | FixedReset Disc | Quote: 21.21 – 22.25 Spot Rate : 1.0400 Average : 0.9012 YTW SCENARIO |