{"id":25342,"date":"2014-05-27T00:46:24","date_gmt":"2014-05-27T05:46:24","guid":{"rendered":"http:\/\/prefblog.com\/?p=25342"},"modified":"2014-05-27T00:46:24","modified_gmt":"2014-05-27T05:46:24","slug":"may-26-2014","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=25342","title":{"rendered":"May 26, 2014"},"content":{"rendered":"

There’s always a lot of political complaining about corporate short-term thinking, with the equity markets forcing managers to focus on the next quarter’s profit rather than investing for the long term. I’m never too sure about how seriously to take this. First, there seems to be quite a lot of technological advance anyway and second, long-range planning by it’s nature can often go astray and blow up the companies just as well as anything else. One way or another, there’s an interesting insight into the role of indexers<\/a>:<\/p>\n

Most of the more than $4-trillion (U.S.) that BlackRock oversees on behalf of clients is in index funds that passively track market benchmarks. Because it can\u2019t sell individual stocks in index funds, BlackRock is, by necessity, in it for the long haul.<\/p>\n

So instead of threatening, [Blackrock Chairman and CEO] Mr. [Larry] Fink cajoles. He writes letters. Very, very well-read letters. His latest went to the heads of all the biggest companies in the United States and Europe, hundreds of them, urging CEOs to think long term.<\/p>\n

\u201cAs the largest index player in the world, we have to own companies, even if we hate \u2018em,\u201d Mr. Fink said in an interview on a recent visit to Toronto. \u201cThe most powerful component of our ownership is our vote, and we have to vote for what we think is in the best interests for the long term. Whether we like you or not, we are going to be an investor for the long term. We want leadership to focus on long-term strategies.\u201d<\/p>\n

In many ways, BlackRock\u2019s fortunes are tied to long-run economic growth. That\u2019s what drives stock indexes higher. It\u2019s a rising-tide-lifts-all-boats game.<\/p><\/blockquote>\n

The Lapdog’s learning that sucking political arse is a risky career choice<\/a> … the demands keep increasing and the promises keep accumulating:<\/p>\n

Less than a year into his new job, Mr. Carney is getting decidedly mixed reviews from a much tougher crowd of critics. He\u2019s already had one big flub, after he was forced to revise his stated plan to hold interest rates down until the unemployment rate fell below 7 per cent.<\/p>\n

The jobless target was achieved two years ahead of Mr. Carney\u2019s forecast, with unemployment hitting a five-year low of 6.8 per cent in March, and the latest jobs reports have been among the strongest in years. Still, Mr. Carney insists he won\u2019t raise interest rates any time soon, although financial types in the City no longer find his \u201cforward guidance\u201d of much use. They have taken to calling it \u201cfuzzy guidance.\u201d<\/p>\n

Some even label Mr. Carney a monetary \u201cdove\u201d who\u2019s tempting fate. For the first time on his watch, members of the central bank\u2019s monetary policy committee disagree over the course of action to take. The governor\u2019s insistence that there is still too much slack in the economy to raise rates is challenged from within. His soon-to-leave deputy recently took a jab: \u201cThere is a real danger of spurious precision and the pretense of knowledge in this area.\u201d<\/p><\/blockquote>\n

What’s the peak of the next interest rate cycle? Place yer bets, gents, place yer bets<\/a>:<\/p>\n

From bond yields to futures and swaps, traders see little chance the economy will strengthen enough over the course of its expansion to compel the Fed to lift its overnight rate beyond about 3.3 percent. That\u2019s less than the historical average of 4.25 percent that New York Fed President William Dudley said would be consistent with the central bank\u2019s current target for inflation and compares with its long-term estimate of 4 percent.<\/p>\n

The divergence reflects deepening concern among bond investors that tepid wage growth and a lack of inflation will persist for years to come, and hold back growth as the Fed moves to end its unprecedented monetary stimulus. Lower peak rates will also reduce the likelihood of any selloff in longer-term Treasuries, which have rewarded holders this year with the biggest returns in two decades.<\/p><\/blockquote>\n

It was a day of modest movement for the Canadian preferred share market, with PerpetualDiscounts and DeemedRetractibles both gaining 2bp, while FixedResets were off 5bp. Volatility was low. Volume was below average.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
HIMIPref™ Preferred Indices
These values reflect the December 2008 revision of the HIMIPref™ Indices<\/strong>
Values are provisional and are finalized monthly<\/td>\n<\/tr>\n
Index<\/td>\nMean
Current
Yield
(at bid)<\/td>\n		Median
YTW<\/td>\n		Median
Average
Trading
Value<\/td>\n		Median
Mod Dur
(YTW)<\/td>\n		Issues<\/td>\nDay’s Perf.<\/td>\nIndex Value<\/td>\n<\/tr>\n
Ratchet<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n-0.4112 %<\/td>\n2,522.7<\/td>\n<\/tr>\n
FixedFloater<\/td>\n4.50 %<\/td>\n3.74 %<\/td>\n31,559<\/td>\n17.91<\/td>\n1<\/td>\n0.4760 %<\/td>\n3,815.4<\/td>\n<\/tr>\n
Floater<\/td>\n2.89 %<\/td>\n2.98 %<\/td>\n49,790<\/td>\n19.74<\/td>\n4<\/td>\n-0.4112 %<\/td>\n2,723.8<\/td>\n<\/tr>\n
OpRet<\/td>\n4.38 %<\/td>\n-10.34 %<\/td>\n34,449<\/td>\n0.10<\/td>\n2<\/td>\n-0.0971 %<\/td>\n2,713.7<\/td>\n<\/tr>\n
SplitShare<\/td>\n4.81 %<\/td>\n4.08 %<\/td>\n63,426<\/td>\n4.18<\/td>\n5<\/td>\n0.1353 %<\/td>\n3,112.4<\/td>\n<\/tr>\n
Interest-Bearing<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n-0.0971 %<\/td>\n2,481.4<\/td>\n<\/tr>\n
Perpetual-Premium<\/td>\n5.50 %<\/td>\n-10.64 %<\/td>\n90,105<\/td>\n0.09<\/td>\n15<\/td>\n0.1643 %<\/td>\n2,408.5<\/td>\n<\/tr>\n
Perpetual-Discount<\/td>\n5.28 %<\/td>\n5.30 %<\/td>\n105,773<\/td>\n14.92<\/td>\n21<\/td>\n0.0182 %<\/td>\n2,552.5<\/td>\n<\/tr>\n
FixedReset<\/td>\n4.51 %<\/td>\n3.54 %<\/td>\n201,762<\/td>\n4.37<\/td>\n75<\/td>\n-0.0482 %<\/td>\n2,557.3<\/td>\n<\/tr>\n
Deemed-Retractible<\/td>\n4.98 %<\/td>\n-3.16 %<\/td>\n146,985<\/td>\n0.09<\/td>\n43<\/td>\n0.0180 %<\/td>\n2,529.6<\/td>\n<\/tr>\n
FloatingReset<\/td>\n2.65 %<\/td>\n2.38 %<\/td>\n152,408<\/td>\n4.02<\/td>\n6<\/td>\n-0.0857 %<\/td>\n2,492.4<\/td>\n<\/tr>\n<\/table>\n\n\n\n\n\n\n
Performance Highlights<\/strong><\/td>\n<\/tr>\n
Issue<\/td>\nIndex<\/td>\nChange<\/td>\nNotes<\/td>\n<\/tr>\n
PWF.PR.A<\/td>\nFloater<\/td>\n-2.45 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-05-26
\nMaturity Price : 19.51
\nEvaluated at bid price : 19.51
\nBid-YTW : 2.70 %<\/td>\n<\/tr>\n
PWF.PR.L<\/td>\nPerpetual-Discount<\/td>\n-1.06 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-05-26
\nMaturity Price : 24.03
\nEvaluated at bid price : 24.31
\nBid-YTW : 5.29 %<\/td>\n<\/tr>\n
PWF.PR.O<\/td>\nPerpetual-Premium<\/td>\n1.05 %<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2017-10-31
\nMaturity Price : 25.25
\nEvaluated at bid price : 26.10
\nBid-YTW : 4.83 %<\/td>\n<\/tr>\n<\/table>\n\n\n\n\n\n\n\n\n\n\n
Volume Highlights<\/strong><\/td>\n<\/tr>\n
Issue<\/td>\nIndex<\/td>\nShares
Traded<\/td>\n		Notes<\/td>\n<\/tr>\n
ENB.PF.C<\/td>\nFixedReset<\/td>\n188,913<\/td>\nRecent new issue<\/a>.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-05-26
\nMaturity Price : 23.12
\nEvaluated at bid price : 25.02
\nBid-YTW : 4.16 %<\/td>\n<\/tr>\n
MFC.PR.D<\/td>\nFixedReset<\/td>\n155,193<\/td>\nCalled for redemption<\/a>.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-07-19
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.97
\nBid-YTW : 4.52 %<\/td>\n<\/tr>\n
TRP.PR.D<\/td>\nFixedReset<\/td>\n136,210<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-05-26
\nMaturity Price : 23.20
\nEvaluated at bid price : 25.10
\nBid-YTW : 3.84 %<\/td>\n<\/tr>\n
SLF.PR.F<\/td>\nFixedReset<\/td>\n133,250<\/td>\nCalled for redemption<\/a>.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-06-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.97
\nBid-YTW : 1.26 %<\/td>\n<\/tr>\n
ENB.PR.T<\/td>\nFixedReset<\/td>\n114,933<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-05-26
\nMaturity Price : 23.03
\nEvaluated at bid price : 24.62
\nBid-YTW : 4.02 %<\/td>\n<\/tr>\n
MFC.PR.L<\/td>\nFixedReset<\/td>\n97,730<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2025-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.00
\nBid-YTW : 3.80 %<\/td>\n<\/tr>\n
There were 25 other index-included issues trading in excess of 10,000 shares.<\/td>\n<\/tr>\n<\/table>\n\n\n\n\n\n\n\n\n\n
Wide Spread Highlights<\/strong><\/td>\n<\/tr>\n
Issue<\/td>\nIndex<\/td>\nQuote Data and Yield Notes<\/td>\n<\/tr>\n
HSB.PR.D<\/td>\nDeemed-Retractible<\/td>\nQuote: 25.60 – 26.33
\nSpot Rate : 0.7300
\nAverage : 0.4707<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-06-25
\nMaturity Price : 25.25
\nEvaluated at bid price : 25.60
\nBid-YTW : -2.80 %<\/td>\n<\/tr>\n

PWF.PR.A<\/td>\nFloater<\/td>\nQuote: 19.51 – 20.30
\nSpot Rate : 0.7900
\nAverage : 0.5875<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-05-26
\nMaturity Price : 19.51
\nEvaluated at bid price : 19.51
\nBid-YTW : 2.70 %<\/td>\n<\/tr>\n

PWF.PR.L<\/td>\nPerpetual-Discount<\/td>\nQuote: 24.31 – 24.65
\nSpot Rate : 0.3400
\nAverage : 0.2622<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-05-26
\nMaturity Price : 24.03
\nEvaluated at bid price : 24.31
\nBid-YTW : 5.29 %<\/td>\n<\/tr>\n

ELF.PR.G<\/td>\nPerpetual-Discount<\/td>\nQuote: 22.30 – 22.57
\nSpot Rate : 0.2700
\nAverage : 0.1974<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-05-26
\nMaturity Price : 21.89
\nEvaluated at bid price : 22.30
\nBid-YTW : 5.37 %<\/td>\n<\/tr>\n

CU.PR.C<\/td>\nFixedReset<\/td>\nQuote: 25.84 – 26.08
\nSpot Rate : 0.2400
\nAverage : 0.1676<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2017-06-01
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.84
\nBid-YTW : 2.82 %<\/td>\n<\/tr>\n

ENB.PR.F<\/td>\nFixedReset<\/td>\nQuote: 24.46 – 24.66
\nSpot Rate : 0.2000
\nAverage : 0.1280<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-05-26
\nMaturity Price : 23.05
\nEvaluated at bid price : 24.46
\nBid-YTW : 4.07 %<\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

There’s always a lot of political complaining about corporate short-term thinking, with the equity markets forcing managers to focus on the next quarter’s profit rather than investing for the long term. I’m never too sure …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[],"class_list":["post-25342","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/25342","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=25342"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/25342\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=25342"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=25342"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=25342"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}