TXPR closed at 488.09, down 1.32% on the day and setting a new 52-week low. Volume today was 1.91-million, second-highest of the past 21 trading days.
CPD closed at 9.72, down 1.22% on the day and setting a new 52-week low. Volume was 18,840, second-lowest of the past 21 trading days.
ZPR closed at 8.21, down 0.73% on the day and setting a new 52-week low. Volume was 157,870, above the median of the past 21 trading days.
Five-year Canada yields were up to 4.28%.
It was a grisly day in lots of places:
U.S. stocks tumbled in a broad sell-off on Wednesday as Alphabet shares slid after the Google parent posted disappointing earnings and as U.S. Treasury yields rose, reviving fears that interest rates could stay higher for longer.
The benchmark S&P 500 index notched its fifth daily decline in six to close below the closely watched 4,200 level. The Nasdaq Composite slumped to its biggest single-session percentage drop since Feb. 21, with interest rate sensitive megacaps weighing heavily on the tech-laden index.
The Dow Jones Industrial Average as well as the S&P/TSX Composite Index finished modestly lower. Energy shares rallied, keeping a lid on losses for the Canadian benchmark, which is on its longest losing streak since June.
Shares of Alphabet Inc plunged 9.5% after the company reported disappointing cloud services revenue, reviving fears of an economic slowdown.
Benchmark Treasury yields resumed their upward drift, edging closer to the 5% level, feeding fears high interest rates could linger.
…
Yields on 10-year Treasury notes rose after robust new U.S. home sales data and mortgage rates reaching 23-year highs stoked fears of prolonged elevated rates.
The BoC maintained its policy rate today but closed with a paragraph of tough talk so we’d know it means business:
The Bank of Canada today held its target for the overnight rate at 5%, with the Bank Rate at 5¼% and the deposit rate at 5%. The Bank is continuing its policy of quantitative tightening.
The global economy is slowing and growth is forecast to moderate further as past increases in policy rates and the recent surge in global bond yields weigh on demand. The Bank projects global GDP growth of 2.9% this year, 2.3% in 2024 and 2.6% in 2025. While this global growth outlook is little changed from the July Monetary Policy Report (MPR), the composition has shifted, with the US economy proving stronger and economic activity in China weaker than expected. Growth in the euro area has slowed further. Inflation has been easing in most economies, as supply bottlenecks resolve and weaker demand relieves price pressures. However, with underlying inflation persisting, central banks continue to be vigilant. Oil prices are higher than was assumed in July, and the war in Israel and Gaza is a new source of geopolitical uncertainty.
In Canada, there is growing evidence that past interest rate increases are dampening economic activity and relieving price pressures. Consumption has been subdued, with softer demand for housing, durable goods and many services. Weaker demand and higher borrowing costs are weighing on business investment. The surge in Canada’s population is easing labour market pressures in some sectors while adding to housing demand and consumption. In the labour market, recent job gains have been below labour force growth and job vacancies have continued to ease. However, the labour market remains on the tight side and wage pressures persist. Overall, a range of indicators suggest that supply and demand in the economy are now approaching balance.
After averaging 1% over the past year, economic growth is expected to continue to be weak for the next year before increasing in late 2024 and through 2025. The near-term weakness in growth reflects both the broadening impact of past increases in interest rates and slower foreign demand. The subsequent pickup is driven by household spending as well as stronger exports and business investment in response to improving foreign demand. Spending by governments contributes materially to growth over the forecast horizon. Overall, the Bank expects the Canadian economy to grow by 1.2% this year, 0.9% in 2024 and 2.5% in 2025.
CPI inflation has been volatile in recent months—2.8% in June, 4.0% in August, and 3.8% in September. Higher interest rates are moderating inflation in many goods that people buy on credit, and this is spreading to services. Food inflation is easing from very high rates. However, in addition to elevated mortgage interest costs, inflation in rent and other housing costs remains high. Near-term inflation expectations and corporate pricing behaviour are normalizing only gradually, and wages are still growing around 4% to 5%. The Bank’s preferred measures of core inflation show little downward momentum.
In the Bank’s October projection, CPI inflation is expected to average about 3½% through the middle of next year before gradually easing to 2% in 2025. Inflation returns to target about the same time as in the July projection, but the near-term path is higher because of energy prices and ongoing persistence in core inflation.
With clearer signs that monetary policy is moderating spending and relieving price pressures, Governing Council decided to hold the policy rate at 5% and to continue to normalize the Bank’s balance sheet. However, Governing Council is concerned that progress towards price stability is slow and inflationary risks have increased, and is prepared to raise the policy rate further if needed. Governing Council wants to see downward momentum in core inflation, and continues to be focused on the balance between demand and supply in the economy, inflation expectations, wage growth and corporate pricing behaviour. The Bank remains resolute in its commitment to restoring price stability for Canadians.
PerpetualDiscounts now yield 7.44% (!), equivalent to 9.67% interest at the standard equivalency factor of 1.3x. Long corporates yielded 5.85% on 2023-10-20 and since then the closing price has been unchanged from 13.75, so the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”) has wudened significantly to 380bp from the 355bp reported October 18.
| 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 | -0.6518 % | 2,062.0 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.6518 % | 3,954.9 |
| Floater | 11.81 % | 11.98 % | 54,113 | 8.14 | 2 | -0.6518 % | 2,279.2 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.0626 % | 3,266.9 |
| SplitShare | 5.12 % | 9.13 % | 42,480 | 1.88 | 7 | -0.0626 % | 3,901.4 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.0626 % | 3,044.1 |
| Perpetual-Premium | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.6450 % | 2,359.3 |
| Perpetual-Discount | 7.28 % | 7.44 % | 47,323 | 12.06 | 31 | -0.6450 % | 2,572.6 |
| FixedReset Disc | 6.32 % | 9.56 % | 109,486 | 10.34 | 55 | -1.0861 % | 2,021.2 |
| Insurance Straight | 7.14 % | 7.35 % | 62,090 | 12.11 | 16 | -1.0530 % | 2,520.2 |
| FloatingReset | 11.58 % | 11.84 % | 32,408 | 8.23 | 1 | -1.7808 % | 2,306.5 |
| FixedReset Prem | 4.75 % | 4.82 % | 391,885 | 0.10 | 1 | 0.0801 % | 2,301.9 |
| FixedReset Bank Non | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -1.0861 % | 2,066.1 |
| FixedReset Ins Non | 6.47 % | 9.48 % | 69,273 | 10.62 | 14 | -0.7844 % | 2,197.6 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| CIU.PR.A | Perpetual-Discount | -5.96 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 15.15 Evaluated at bid price : 15.15 Bid-YTW : 7.76 % |
| GWO.PR.S | Insurance Straight | -5.33 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 17.04 Evaluated at bid price : 17.04 Bid-YTW : 7.82 % |
| BNS.PR.I | FixedReset Disc | -4.74 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 20.10 Evaluated at bid price : 20.10 Bid-YTW : 8.38 % |
| MFC.PR.L | FixedReset Ins Non | -3.77 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 16.60 Evaluated at bid price : 16.60 Bid-YTW : 9.67 % |
| FTS.PR.J | Perpetual-Discount | -3.70 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 16.90 Evaluated at bid price : 16.90 Bid-YTW : 7.17 % |
| BIP.PR.E | FixedReset Disc | -3.51 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 18.12 Evaluated at bid price : 18.12 Bid-YTW : 9.88 % |
| NA.PR.W | FixedReset Disc | -2.84 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 15.75 Evaluated at bid price : 15.75 Bid-YTW : 9.96 % |
| BMO.PR.Y | FixedReset Disc | -2.78 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 16.11 Evaluated at bid price : 16.11 Bid-YTW : 10.08 % |
| BN.PR.T | FixedReset Disc | -2.71 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 12.20 Evaluated at bid price : 12.20 Bid-YTW : 11.81 % |
| GWO.PR.I | Insurance Straight | -2.64 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 15.50 Evaluated at bid price : 15.50 Bid-YTW : 7.37 % |
| CU.PR.I | FixedReset Disc | -2.62 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 19.33 Evaluated at bid price : 19.33 Bid-YTW : 9.71 % |
| BN.PR.R | FixedReset Disc | -2.45 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 11.95 Evaluated at bid price : 11.95 Bid-YTW : 12.16 % |
| BN.PR.X | FixedReset Disc | -2.34 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 12.12 Evaluated at bid price : 12.12 Bid-YTW : 11.73 % |
| BMO.PR.F | FixedReset Disc | -2.00 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 21.97 Evaluated at bid price : 22.53 Bid-YTW : 8.68 % |
| BIP.PR.F | FixedReset Disc | -1.98 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 17.85 Evaluated at bid price : 17.85 Bid-YTW : 10.16 % |
| TD.PF.B | FixedReset Disc | -1.89 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 17.17 Evaluated at bid price : 17.17 Bid-YTW : 9.38 % |
| BN.PF.J | FixedReset Disc | -1.80 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 16.89 Evaluated at bid price : 16.89 Bid-YTW : 10.48 % |
| SLF.PR.J | FloatingReset | -1.78 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 14.34 Evaluated at bid price : 14.34 Bid-YTW : 11.84 % |
| BN.PF.I | FixedReset Disc | -1.69 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 16.85 Evaluated at bid price : 16.85 Bid-YTW : 10.94 % |
| FTS.PR.G | FixedReset Disc | -1.65 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 17.84 Evaluated at bid price : 17.84 Bid-YTW : 9.03 % |
| BN.PF.E | FixedReset Disc | -1.65 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 13.71 Evaluated at bid price : 13.71 Bid-YTW : 11.70 % |
| RY.PR.Z | FixedReset Disc | -1.55 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 17.51 Evaluated at bid price : 17.51 Bid-YTW : 9.15 % |
| TD.PF.J | FixedReset Disc | -1.52 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 19.48 Evaluated at bid price : 19.48 Bid-YTW : 8.49 % |
| GWO.PR.N | FixedReset Ins Non | -1.51 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 11.76 Evaluated at bid price : 11.76 Bid-YTW : 10.28 % |
| MFC.PR.C | Insurance Straight | -1.46 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 16.25 Evaluated at bid price : 16.25 Bid-YTW : 7.04 % |
| BN.PF.D | Perpetual-Discount | -1.45 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 15.62 Evaluated at bid price : 15.62 Bid-YTW : 7.97 % |
| RY.PR.M | FixedReset Disc | -1.45 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 15.63 Evaluated at bid price : 15.63 Bid-YTW : 9.99 % |
| SLF.PR.H | FixedReset Ins Non | -1.44 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 15.02 Evaluated at bid price : 15.02 Bid-YTW : 9.48 % |
| CM.PR.Q | FixedReset Disc | -1.43 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 16.56 Evaluated at bid price : 16.56 Bid-YTW : 9.77 % |
| PVS.PR.I | SplitShare | -1.28 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-10-31 Maturity Price : 25.00 Evaluated at bid price : 23.20 Bid-YTW : 9.13 % |
| NA.PR.C | FixedReset Disc | -1.25 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 22.71 Evaluated at bid price : 23.70 Bid-YTW : 7.91 % |
| NA.PR.S | FixedReset Disc | -1.24 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 17.50 Evaluated at bid price : 17.50 Bid-YTW : 9.46 % |
| BN.PF.H | FixedReset Disc | -1.23 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 18.50 Evaluated at bid price : 18.50 Bid-YTW : 10.59 % |
| NA.PR.E | FixedReset Disc | -1.21 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 18.75 Evaluated at bid price : 18.75 Bid-YTW : 8.71 % |
| MFC.PR.I | FixedReset Ins Non | -1.19 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 19.10 Evaluated at bid price : 19.10 Bid-YTW : 9.04 % |
| MFC.PR.M | FixedReset Ins Non | -1.17 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 16.85 Evaluated at bid price : 16.85 Bid-YTW : 9.61 % |
| PWF.PR.S | Perpetual-Discount | -1.16 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 16.26 Evaluated at bid price : 16.26 Bid-YTW : 7.44 % |
| BN.PF.C | Perpetual-Discount | -1.15 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 15.50 Evaluated at bid price : 15.50 Bid-YTW : 7.95 % |
| BN.PF.G | FixedReset Disc | -1.14 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 13.88 Evaluated at bid price : 13.88 Bid-YTW : 11.90 % |
| SLF.PR.E | Insurance Straight | -1.13 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 16.63 Evaluated at bid price : 16.63 Bid-YTW : 6.86 % |
| BN.PR.K | Floater | -1.12 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 10.58 Evaluated at bid price : 10.58 Bid-YTW : 12.19 % |
| SLF.PR.C | Insurance Straight | -1.02 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 16.50 Evaluated at bid price : 16.50 Bid-YTW : 6.84 % |
| CM.PR.T | FixedReset Disc | -1.01 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 22.02 Evaluated at bid price : 22.60 Bid-YTW : 8.30 % |
| BMO.PR.T | FixedReset Disc | 1.14 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 16.90 Evaluated at bid price : 16.90 Bid-YTW : 9.56 % |
| PWF.PF.A | Perpetual-Discount | 1.19 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 15.28 Evaluated at bid price : 15.28 Bid-YTW : 7.42 % |
| BN.PF.F | FixedReset Disc | 3.02 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 15.70 Evaluated at bid price : 15.70 Bid-YTW : 11.16 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| TD.PF.B | FixedReset Disc | 42,997 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 17.17 Evaluated at bid price : 17.17 Bid-YTW : 9.38 % |
| TD.PF.C | FixedReset Disc | 34,614 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 16.10 Evaluated at bid price : 16.10 Bid-YTW : 9.79 % |
| MFC.PR.J | FixedReset Ins Non | 30,481 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 19.05 Evaluated at bid price : 19.05 Bid-YTW : 8.87 % |
| TD.PF.D | FixedReset Disc | 27,586 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 16.80 Evaluated at bid price : 16.80 Bid-YTW : 9.76 % |
| FTS.PR.G | FixedReset Disc | 26,363 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 17.84 Evaluated at bid price : 17.84 Bid-YTW : 9.03 % |
| TD.PF.E | FixedReset Disc | 23,105 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-25 Maturity Price : 16.95 Evaluated at bid price : 16.95 Bid-YTW : 9.66 % |
| There were 30 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| POW.PR.B | Perpetual-Discount | Quote: 18.06 – 23.00 Spot Rate : 4.9400 Average : 2.6793 YTW SCENARIO |
| GWO.PR.I | Insurance Straight | Quote: 15.50 – 17.80 Spot Rate : 2.3000 Average : 1.3649 YTW SCENARIO |
| BN.PF.A | FixedReset Disc | Quote: 18.30 – 20.04 Spot Rate : 1.7400 Average : 1.1914 YTW SCENARIO |
| CU.PR.C | FixedReset Disc | Quote: 16.60 – 21.72 Spot Rate : 5.1200 Average : 4.6202 YTW SCENARIO |
| PVS.PR.J | SplitShare | Quote: 21.00 – 22.15 Spot Rate : 1.1500 Average : 0.6778 YTW SCENARIO |
| NA.PR.S | FixedReset Disc | Quote: 17.50 – 18.54 Spot Rate : 1.0400 Average : 0.6135 YTW SCENARIO |
[…] PerpetualDiscounts now yield 7.29%, equivalent to 9.48% interest at the standard equivalency factor of 1.3x. Long corporates yielded 5.71% on 2023-10-27 and since then the closing price has been unchanged at 13.90, so the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”) has narrowed slightly (and perhaps spuriously) to 375bp from the 380bp reported October 25. […]