The Institute for Supply Management (ISM) survey came out today:
U.S. manufacturing contracted for a sixth straight month in August as factories dealt with the fallout from the Trump administration’s import tariffs, with some manufacturers describing the current business environment as “much worse than the Great Recession.”
The Institute for Supply Management (ISM) survey on Tuesday also showed some manufacturers complaining that the sweeping import duties were making it difficult to manufacture goods in the United States. President Donald Trump has defended his protectionist trade policy, which has raised the nation’s average tariff rate to the highest in a century, as necessary to revive a long-declining U.S. industrial base.
That was reinforced by government data showing spending on the construction of factories dropped in July and was down 6.7 per cent from a year ago. A U.S. appeals court ruled last Friday that most of Trump’s tariffs were illegal, adding more uncertainty for businesses.
…
The ISM said its manufacturing PMI edged up to 48.7 last month from 48.0 in July. A PMI reading below 50 indicates contraction in manufacturing, which accounts for 10.2 per cent of the economy. Economists polled by Reuters had forecast the PMI would rise to 49.0.
…
Tariffs continued to dominate commentary from manufacturers. Some makers of transportation equipment said conditions were worse than the 2007-09 recession, adding “there is absolutely no activity” and “this is 100 percent attributable to current tariff policy and the uncertainty it has created.” Some viewed the conditions as consistent with “stagflation.”Some electrical equipment, appliances and components producers complained that “‘made in the USA’ has become even more difficult due to tariffs on many components.” They said the “administration wants manufacturing jobs in the U.S., but we are losing higher-skilled and higher-paying roles.” Others reported that because of the lack of “stability in trade and economics, capital expenditures spending and hiring are frozen.”
Manufacturers of computer and electronic products said “tariffs continue to wreak havoc on planning and scheduling activities,” adding that “plans to bring production back into (the) U.S. are impacted by higher material costs, making it more difficult to justify the return.”
Food, beverage and tobacco products manufacturers warned that everything made of organic sugar was “about to get significantly more expensive” because of a 50 per cent tariff on imports from Brazil and the U.S. Department of Agriculture’s elimination of the specialty sugar quota.
Markets are in a bit of a tizzy:
France’s 30-year government bond yields hit their highest levels in more than 16 years on Tuesday at around 4.5%, while yields on 30-year German bonds hit a fresh 14-year high at about 3.4%. In the UK, 30-year gilt yields notched their highest mark since 1998, as investors looked warily ahead to the government’s autumn budget plans.
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The U.S. 30-year yield was up 5.1 basis points at 4.96%, while benchmark 10-year Treasury yields rose 4.5 bps to 4.27%. Canada’s 10-year yield rose 7 basis points to 3.44%, although that was well within trading ranges of the past month.
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Europe’s broad Stoxx 600 share benchmark was down 1.5%. The S&P 500 was down 0.69%, the Dow Jones industrial average lost 0.55%, and the Nasdaq fell 0.82%.The S&P/TSX composite index ended up 0.2% at 28,615.62, eclipsing Friday’s record closing high.
| 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 | 6.74 % | 7.17 % | 37,899 | 13.29 | 1 | 1.2384 % | 2,443.3 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.4029 % | 4,624.2 |
| Floater | 6.57 % | 6.90 % | 44,769 | 12.59 | 3 | -0.4029 % | 2,665.0 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0462 % | 3,653.6 |
| SplitShare | 4.79 % | 4.29 % | 54,796 | 3.43 | 6 | 0.0462 % | 4,363.2 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0462 % | 3,404.3 |
| Perpetual-Premium | 5.52 % | 4.93 % | 68,357 | 13.99 | 3 | -0.4108 % | 3,057.7 |
| Perpetual-Discount | 5.61 % | 5.71 % | 43,847 | 14.25 | 28 | 0.0599 % | 3,352.6 |
| FixedReset Disc | 5.82 % | 6.20 % | 126,571 | 13.36 | 32 | 0.0824 % | 3,032.9 |
| Insurance Straight | 5.51 % | 5.51 % | 53,924 | 14.64 | 18 | -0.4888 % | 3,285.4 |
| FloatingReset | 5.16 % | 4.36 % | 41,513 | 0.16 | 1 | 0.0000 % | 3,809.5 |
| FixedReset Prem | 5.67 % | 5.13 % | 121,452 | 2.44 | 21 | -0.1021 % | 2,623.4 |
| FixedReset Bank Non | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0824 % | 3,100.2 |
| FixedReset Ins Non | 5.29 % | 5.61 % | 69,822 | 14.34 | 15 | -0.5057 % | 3,029.7 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| GWO.PR.P | Insurance Straight | -5.12 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-09-02 Maturity Price : 22.71 Evaluated at bid price : 23.00 Bid-YTW : 5.87 % |
| MFC.PR.F | FixedReset Ins Non | -3.43 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-09-02 Maturity Price : 17.45 Evaluated at bid price : 17.45 Bid-YTW : 6.09 % |
| PWF.PR.L | Perpetual-Discount | -3.14 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-09-02 Maturity Price : 21.65 Evaluated at bid price : 21.90 Bid-YTW : 5.89 % |
| SLF.PR.H | FixedReset Ins Non | -2.27 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-09-02 Maturity Price : 21.50 Evaluated at bid price : 21.50 Bid-YTW : 5.77 % |
| CU.PR.D | Perpetual-Discount | -2.21 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-09-02 Maturity Price : 21.39 Evaluated at bid price : 21.66 Bid-YTW : 5.68 % |
| NA.PR.I | FixedReset Prem | -2.19 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-09-02 Maturity Price : 23.44 Evaluated at bid price : 25.46 Bid-YTW : 5.80 % |
| GWO.PR.Q | Insurance Straight | -2.17 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-09-02 Maturity Price : 22.22 Evaluated at bid price : 22.50 Bid-YTW : 5.72 % |
| ENB.PR.N | FixedReset Disc | -1.80 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-09-02 Maturity Price : 22.69 Evaluated at bid price : 23.50 Bid-YTW : 6.20 % |
| MFC.PR.J | FixedReset Ins Non | -1.71 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-09-02 Maturity Price : 23.37 Evaluated at bid price : 24.75 Bid-YTW : 5.65 % |
| GWO.PR.N | FixedReset Ins Non | -1.54 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-09-02 Maturity Price : 16.00 Evaluated at bid price : 16.00 Bid-YTW : 6.55 % |
| BN.PF.I | FixedReset Prem | 1.04 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2027-03-31 Maturity Price : 25.00 Evaluated at bid price : 25.27 Bid-YTW : 5.33 % |
| FTS.PR.G | FixedReset Disc | 1.05 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-09-02 Maturity Price : 22.99 Evaluated at bid price : 24.04 Bid-YTW : 5.45 % |
| FTS.PR.J | Perpetual-Discount | 1.09 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-09-02 Maturity Price : 22.07 Evaluated at bid price : 22.30 Bid-YTW : 5.35 % |
| BN.PF.E | FixedReset Disc | 1.11 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-09-02 Maturity Price : 21.50 Evaluated at bid price : 21.79 Bid-YTW : 6.30 % |
| BN.PF.K | Ratchet | 1.24 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-09-02 Maturity Price : 22.00 Evaluated at bid price : 16.35 Bid-YTW : 7.17 % |
| BN.PF.C | Perpetual-Discount | 2.31 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-09-02 Maturity Price : 21.25 Evaluated at bid price : 21.25 Bid-YTW : 5.82 % |
| CU.PR.J | Perpetual-Discount | 3.10 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-09-02 Maturity Price : 21.37 Evaluated at bid price : 21.65 Bid-YTW : 5.51 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| BN.PR.R | FixedReset Disc | 116,000 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-09-02 Maturity Price : 20.32 Evaluated at bid price : 20.32 Bid-YTW : 6.39 % |
| FFH.PR.G | FixedReset Prem | 78,400 | YTW SCENARIO Maturity Type : Call Maturity Date : 2025-10-30 Maturity Price : 25.00 Evaluated at bid price : 25.12 Bid-YTW : 4.51 % |
| BN.PF.G | FixedReset Disc | 63,400 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-09-02 Maturity Price : 22.17 Evaluated at bid price : 22.80 Bid-YTW : 6.27 % |
| TD.PF.E | FixedReset Prem | 35,300 | YTW SCENARIO Maturity Type : Call Maturity Date : 2025-10-31 Maturity Price : 25.00 Evaluated at bid price : 24.99 Bid-YTW : 5.31 % |
| PWF.PR.T | FixedReset Disc | 33,900 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-09-02 Maturity Price : 23.01 Evaluated at bid price : 24.21 Bid-YTW : 5.54 % |
| RY.PR.M | FixedReset Disc | 30,700 | YTW SCENARIO Maturity Type : Call Maturity Date : 2025-11-24 Maturity Price : 25.00 Evaluated at bid price : 24.95 Bid-YTW : 4.21 % |
| There were 7 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| See TMX DataLinx: ‘Last’ != ‘Close’ and the posts linked therein for an idea of why these quotes are so horrible. | ||
| Issue | Index | Quote Data and Yield Notes |
| GWO.PR.P | Insurance Straight | Quote: 23.00 – 24.29 Spot Rate : 1.2900 Average : 0.8447 YTW SCENARIO |
| CIU.PR.A | Perpetual-Discount | Quote: 20.55 – 21.55 Spot Rate : 1.0000 Average : 0.5840 YTW SCENARIO |
| MFC.PR.B | Insurance Straight | Quote: 21.70 – 23.50 Spot Rate : 1.8000 Average : 1.4516 YTW SCENARIO |
| PWF.PR.L | Perpetual-Discount | Quote: 21.90 – 22.90 Spot Rate : 1.0000 Average : 0.6805 YTW SCENARIO |
| POW.PR.B | Perpetual-Discount | Quote: 23.61 – 24.50 Spot Rate : 0.8900 Average : 0.5803 YTW SCENARIO |
| MFC.PR.Q | FixedReset Ins Non | Quote: 24.90 – 25.65 Spot Rate : 0.7500 Average : 0.4487 YTW SCENARIO |