April 26, 2022

Markets continued to not be boring on Tuesday.

The S&P 500 ended the day down a hefty 2.8% while Toronto was down 1.5%.

Among the biggest decliners for stocks that I track: Shopify was down 6.0%, Amazon was down 4.6%, Visa was down 4.2% (but then released a strong earnings report after the close).

Rate reset shares were mostly down once again. I have to confess I am perplexed why they are declining. Some year s ago when interest rates declined (which sends regular prefs higher) the resets fell because they would reset to lower dividend levels and it seems the market spreads over the 5 year increased as rates fell. Now with interest rates rising (which does push regular perpetual shares lower), these reset shares have also declined noticeably despite the fact that they can be expected to reset at higher dividends. It may be that the selling pressure relates more to a general negative tone in the markets than to the current and expected reset yields on these. In any case they look attractive to me. I have updated the report on the Enbridge rate reset on our list. See the Subscriber Home Page.

As noted earlier today today I sold some Enbridge shares. I put some of that money into buying a rate reset of Brookfield Office Properties (BRO.PR.A) and I bought some ENB.PF.A and some Canadian Western Bank shares.

 

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