{"id":50577,"date":"2019-07-31T10:55:00","date_gmt":"2019-07-31T14:55:00","guid":{"rendered":"https:\/\/prefblog.com\/?p=50577"},"modified":"2025-11-11T10:58:07","modified_gmt":"2025-11-11T15:58:07","slug":"july-31-2019","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=50577","title":{"rendered":"July 31, 2019"},"content":{"rendered":"

The FOMC announcement<\/a> came today:<\/p>\n

\n

Information received since the Federal Open Market Committee met in June indicates that the labor market remains strong and that economic activity has been rising at a moderate rate. Job gains have been solid, on average, in recent months, and the unemployment rate has remained low. Although growth of household spending has picked up from earlier in the year, growth of business fixed investment has been soft. On a 12-month basis, overall inflation and inflation for items other than food and energy are running below 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed.
…<\/b>
In light of the implications of global developments for the economic outlook as well as muted inflation pressures, the Committee decided to lower the target range for the federal funds rate to 2 to 2-1\/4 percent. This action supports the Committee’s view that sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective are the most likely outcomes, but uncertainties about this outlook remain.
…<\/b>
The Committee will conclude the reduction of its aggregate securities holdings in the System Open Market Account in August, two months earlier than previously indicated.<\/p>\n

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michelle W. Bowman; Lael Brainard; James Bullard; Richard H. Clarida; Charles L. Evans; and Randal K. Quarles. Voting against the action were Esther L. George and Eric S. Rosengren, who preferred at this meeting to maintain the target range for the federal funds rate at 2-1\/4 to 2-1\/2 percent.<\/p>\n<\/blockquote>\n

But the tone for the future was relatively hawkish<\/a>:<\/p>\n

\n

The Dow and S&P 500 suffered their biggest daily percentage drops since May 31 on Wednesday after the Federal Reserve cut interest rates for the first time in a decade, but remarks by Fed Chair Jerome Powell dampened expectations for further cuts going forward.<\/p>\n

Based on the latest available data, the Dow Jones Industrial Average fell 336.26 points, or 1.24 per cent, to 26,861.76, the S&P 500 lost 33.07 points, or 1.10 per cent, to 2,980.11, and the Nasdaq Composite dropped 98.20 points, or 1.19 per cent, to 8,175.42.<\/p>\n

In Toronto, the S&P\/TSX composite index also dropped, closing down 0.36 per cent, or 59.49 points, at 16,406.56.<\/p>\n<\/blockquote>\n

The five-year Canada yield was unchanged at 1.45%<\/a>.<\/p>\n

PerpetualDiscounts now yield 5.59%, equivalent to 7.27% interest at the standard equivalency factor of 1.3x. Long corporates<\/a> now yield 3.36%, so the pre-tax interest-equivalent spread (in this context, the \u201cSeniority Spread\u201d) is now an amazing 390bp, a significant widening from the 375bp reported July 24<\/a>. We also saw a spread this wide on June 19<\/a> … but it’s pretty damn rare!<\/p>\n\n\n\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>\n0.3681 %<\/td>\n2,002.1<\/td>\n<\/tr>\n
FixedFloater<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n0.3681 %<\/td>\n3,673.8<\/td>\n<\/tr>\n
Floater<\/td>\n5.97 %<\/td>\n6.09 %<\/td>\n39,332<\/td>\n13.74<\/td>\n4<\/td>\n0.3681 %<\/td>\n2,117.2<\/td>\n<\/tr>\n
OpRet<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n-0.1182 %<\/td>\n3,343.8<\/td>\n<\/tr>\n
SplitShare<\/td>\n4.66 %<\/td>\n4.66 %<\/td>\n75,236<\/td>\n4.11<\/td>\n7<\/td>\n-0.1182 %<\/td>\n3,993.2<\/td>\n<\/tr>\n
Interest-Bearing<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n-0.1182 %<\/td>\n3,115.7<\/td>\n<\/tr>\n
Perpetual-Premium<\/td>\n5.61 %<\/td>\n-18.18 %<\/td>\n56,449<\/td>\n0.09<\/td>\n7<\/td>\n0.0168 %<\/td>\n2,990.3<\/td>\n<\/tr>\n
Perpetual-Discount<\/td>\n5.44 %<\/td>\n5.59 %<\/td>\n57,307<\/td>\n14.48<\/td>\n25<\/td>\n0.0160 %<\/td>\n3,130.2<\/td>\n<\/tr>\n
FixedReset Disc<\/td>\n5.41 %<\/td>\n5.25 %<\/td>\n166,992<\/td>\n15.00<\/td>\n69<\/td>\n-0.1360 %<\/td>\n2,129.9<\/td>\n<\/tr>\n
Deemed-Retractible<\/td>\n5.22 %<\/td>\n5.90 %<\/td>\n66,140<\/td>\n7.93<\/td>\n27<\/td>\n0.0932 %<\/td>\n3,121.2<\/td>\n<\/tr>\n
FloatingReset<\/td>\n4.05 %<\/td>\n4.42 %<\/td>\n35,315<\/td>\n2.41<\/td>\n4<\/td>\n0.1986 %<\/td>\n2,349.3<\/td>\n<\/tr>\n
FixedReset Prem<\/td>\n5.13 %<\/td>\n3.72 %<\/td>\n159,888<\/td>\n1.88<\/td>\n17<\/td>\n-0.0610 %<\/td>\n2,601.4<\/td>\n<\/tr>\n
FixedReset Bank Non<\/td>\n1.98 %<\/td>\n4.05 %<\/td>\n86,910<\/td>\n2.42<\/td>\n3<\/td>\n-0.1489 %<\/td>\n2,655.1<\/td>\n<\/tr>\n
FixedReset Ins Non<\/td>\n5.24 %<\/td>\n7.36 %<\/td>\n84,716<\/td>\n8.04<\/td>\n22<\/td>\n0.0287 %<\/td>\n2,175.7<\/td>\n<\/tr>\n<\/table>\n\n\n\n\n\n\n\n\n\n\n\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
TD.PF.D<\/td>\nFixedReset Disc<\/td>\n-2.07 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2049-07-31
\nMaturity Price : 20.37
\nEvaluated at bid price : 20.37
\nBid-YTW : 5.14 %<\/td>\n<\/tr>\n
HSE.PR.C<\/td>\nFixedReset Disc<\/td>\n-1.74 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2049-07-31
\nMaturity Price : 18.08
\nEvaluated at bid price : 18.08
\nBid-YTW : 6.35 %<\/td>\n<\/tr>\n
BIP.PR.F<\/td>\nFixedReset Disc<\/td>\n-1.34 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2049-07-31
\nMaturity Price : 21.40
\nEvaluated at bid price : 21.40
\nBid-YTW : 6.04 %<\/td>\n<\/tr>\n
NA.PR.G<\/td>\nFixedReset Disc<\/td>\n-1.25 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2049-07-31
\nMaturity Price : 20.49
\nEvaluated at bid price : 20.49
\nBid-YTW : 5.34 %<\/td>\n<\/tr>\n
RY.PR.Z<\/td>\nFixedReset Disc<\/td>\n-1.15 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2049-07-31
\nMaturity Price : 18.00
\nEvaluated at bid price : 18.00
\nBid-YTW : 5.06 %<\/td>\n<\/tr>\n
SLF.PR.J<\/td>\nFloatingReset<\/td>\n1.06 %<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2030-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 13.41
\nBid-YTW : 10.52 %<\/td>\n<\/tr>\n
BAM.PF.B<\/td>\nFixedReset Disc<\/td>\n1.06 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2049-07-31
\nMaturity Price : 17.20
\nEvaluated at bid price : 17.20
\nBid-YTW : 6.12 %<\/td>\n<\/tr>\n
TRP.PR.G<\/td>\nFixedReset Disc<\/td>\n1.11 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2049-07-31
\nMaturity Price : 18.25
\nEvaluated at bid price : 18.25
\nBid-YTW : 6.02 %<\/td>\n<\/tr>\n
BAM.PR.K<\/td>\nFloater<\/td>\n1.14 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2049-07-31
\nMaturity Price : 11.50
\nEvaluated at bid price : 11.50
\nBid-YTW : 6.09 %<\/td>\n<\/tr>\n
MFC.PR.K<\/td>\nFixedReset Ins Non<\/td>\n1.20 %<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2030-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 18.52
\nBid-YTW : 7.76 %<\/td>\n<\/tr>\n
IFC.PR.A<\/td>\nFixedReset Ins Non<\/td>\n1.35 %<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2030-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 15.00
\nBid-YTW : 9.39 %<\/td>\n<\/tr>\n
EMA.PR.H<\/td>\nFixedReset Disc<\/td>\n1.38 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2049-07-31
\nMaturity Price : 23.02
\nEvaluated at bid price : 24.40
\nBid-YTW : 4.95 %<\/td>\n<\/tr>\n
HSE.PR.A<\/td>\nFixedReset Disc<\/td>\n1.49 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2049-07-31
\nMaturity Price : 12.25
\nEvaluated at bid price : 12.25
\nBid-YTW : 6.29 %<\/td>\n<\/tr>\n
TRP.PR.B<\/td>\nFixedReset Disc<\/td>\n2.02 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2049-07-31
\nMaturity Price : 11.60
\nEvaluated at bid price : 11.60
\nBid-YTW : 5.79 %<\/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
RY.PR.H<\/td>\nFixedReset Disc<\/td>\n87,665<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2049-07-31
\nMaturity Price : 18.12
\nEvaluated at bid price : 18.12
\nBid-YTW : 5.06 %<\/td>\n<\/tr>\n
RY.PR.O<\/td>\nPerpetual-Discount<\/td>\n31,723<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2049-07-31
\nMaturity Price : 23.62
\nEvaluated at bid price : 24.10
\nBid-YTW : 5.06 %<\/td>\n<\/tr>\n
TD.PF.K<\/td>\nFixedReset Disc<\/td>\n31,720<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2049-07-31
\nMaturity Price : 20.40
\nEvaluated at bid price : 20.40
\nBid-YTW : 5.14 %<\/td>\n<\/tr>\n
MFC.PR.M<\/td>\nFixedReset Ins Non<\/td>\n31,239<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2030-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 17.35
\nBid-YTW : 8.28 %<\/td>\n<\/tr>\n
SLF.PR.J<\/td>\nFloatingReset<\/td>\n27,900<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2030-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 13.41
\nBid-YTW : 10.52 %<\/td>\n<\/tr>\n
RY.PR.M<\/td>\nFixedReset Disc<\/td>\n27,506<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2049-07-31
\nMaturity Price : 19.28
\nEvaluated at bid price : 19.28
\nBid-YTW : 5.19 %<\/td>\n<\/tr>\n
There were 24 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
BMO.PR.B<\/td>\nFixedReset Prem<\/td>\nQuote: 25.60 – 26.00
\nSpot Rate : 0.4000
\nAverage : 0.2387<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2022-02-25
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.60
\nBid-YTW : 3.74 %<\/td>\n<\/tr>\n

TD.PF.D<\/td>\nFixedReset Disc<\/td>\nQuote: 20.37 – 20.85
\nSpot Rate : 0.4800
\nAverage : 0.3286<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2049-07-31
\nMaturity Price : 20.37
\nEvaluated at bid price : 20.37
\nBid-YTW : 5.14 %<\/td>\n<\/tr>\n

NA.PR.G<\/td>\nFixedReset Disc<\/td>\nQuote: 20.49 – 20.85
\nSpot Rate : 0.3600
\nAverage : 0.2482<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2049-07-31
\nMaturity Price : 20.49
\nEvaluated at bid price : 20.49
\nBid-YTW : 5.34 %<\/td>\n<\/tr>\n

PVS.PR.E<\/td>\nSplitShare<\/td>\nQuote: 25.65 – 25.99
\nSpot Rate : 0.3400
\nAverage : 0.2329<\/p>\n

YTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-10-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.65
\nBid-YTW : 4.93 %<\/td>\n<\/tr>\n

BMO.PR.Z<\/td>\nPerpetual-Discount<\/td>\nQuote: 24.99 – 25.34
\nSpot Rate : 0.3500
\nAverage : 0.2467<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2024-08-25
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.99
\nBid-YTW : 4.96 %<\/td>\n<\/tr>\n

PWF.PR.R<\/td>\nPerpetual-Premium<\/td>\nQuote: 25.02 – 25.31
\nSpot Rate : 0.2900
\nAverage : 0.1881<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2021-04-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.02
\nBid-YTW : 5.46 %<\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

The FOMC announcement came today: Information received since the Federal Open Market Committee met in June indicates that the labor market remains strong and that economic activity has been rising at a moderate rate. Job …<\/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-50577","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/50577","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=50577"}],"version-history":[{"count":1,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/50577\/revisions"}],"predecessor-version":[{"id":50578,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/50577\/revisions\/50578"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=50577"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=50577"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=50577"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}