February 1, 2019, Quick Update: Peanut Convertible Debentures Power Rankings

A polar vortex has descended upon most of the country (sidebar: we all need to move to Vancouver Island) and it's a Super Bowl Sunday featuring the New England Patriots for about the 25th consecutive time (yawn) and the illegitimate Los Angeles Rams (yes, I am a New Orleans Saints fan).  Might as well update the Peanut Convertible Debentures Power Rankings, right?

So. This is the 39th update of the Peanut Power Rankings, which takes into account data current to February 1, 2019.  Thank you for continuing to read and support the Canadian Convertible Debentures Project.
      
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For a summary of the rankings of our entire convertible debenture coverage universe including the quantitative model prices of, and notes on each issue we follow, click on the table below to view it larger.

For background information on the Peanut Power Rankings, please see our FAQs by clicking here.

Important: Like everything else on this website, content here is provided as information and opinions only and not intended to be a provision of investment advice or a recommendation of any investment action in any form. There is no guarantee, warranty, representation, or other assurance whatsoever on any of the information provided.  Information and opinions reflect our views as of the date provided, but may change without notice.  Investments made in convertible debentures are exposed to the risk of financial losses, and as with all disseminated information concerning investments, it is highly recommended that an individual consult with a qualified investment professional before making any investment decisions.


Canadian Convertible Debentures Project: In the Media

Late last year, our sleepy little blog received some ink in the press. On Tuesday, December 4, my interview with columnist, Larry MacDonald, ran in the Globe and Mail, where we talked about convertible debentures among other topics.  The column is accessible online here for Globe and Mail subscribers; for those of you without a subscription, the column also appeared on page B8 of the print version of the newspaper.  I don't think there was too much in the interview that we haven't already covered here at the Canadian Convertible Debentures Project, but maybe some of you will find it interesting.

Public Service Message: A New Convertible Debentures List

Throughout the last year or so, we've received numerous emails asking about the Financial Post's convertible debentures list, which has vanished without a trace from the newspaper's website.  To make matters worse, the basic list published on the TSX website appears like it hasn't been updated since last fall.

Well, obviously this sucks like the state of refereeing in today's NFL, but since we like to try to solve problems here at the Canadian Convertible Debentures Project, we decided to go to work and came up with the Peanut Convertible Debentures Big Board, which you can access here.  No, it's not a complete list of Canadian convertible debentures, but it is a bigger list than the one we have for the Peanut Power Rankings, and hopefully at least some of you out there will still find it useful. 



Market Commentary - Quick Points (February 1, 2019)

• Well, what a difference a month makes. 
• The much-maligned Canadian equity market was all systems go in January, with bargain hunters pushing the TSX up 8.26% since the start of the year.  
• Bond yields ... went lower.  Remember when all anyone could talk about last year was how rates were going up and we should all be prepared?  Hmmmm.  Well ...
• Higher equity markets and lower bond yields meant a good month for Canadian convertible debentures.  As measured by our newly homegrown, homemade, farm-to-table Peanut Convertible Debentures Index™, Canadian convertible are up a handsome 2.03% year-to-date.  Not bad, not bad at all. 
• Ok, back to interest rates: when Jerome Powell, the Fed Chairman, spoke earlier this week, it was surprising, even to us (who, if you read our stuff in the last year, that interest rates might not rise as much as everyone was expecting) just how dovish his comments seemed.  This was pretty much a 180-degree turn from comments made in December.  Many economists are now only expecting one more interest rate hike, at most, for 2019, and some are suggesting interest rate cuts could occur in 2020.
• To us, this hints at two troubling possibilities.  First, a US recession truly could happen next year, thanks in large part to the oh-so-many policy mistakes from the White House.  Two, perhaps the Fed is losing its independence from said White House? Let's hope not for both of these possibilities, but we're living in surreal times and who's to discount anything anymore. 
• Actually, Powell's let's-wait-and-see stance was pretty much a page from Stephen Poloz's playbook here in Canada.  With the US now on hold, that probably puts a cap on the number of interest rate hikes we'll see in Canada as well - we can't have the loonie taking off when the trade front is still a bit shaky.  I'm expecting at most one more interest rate hike up here maybe late in the year and am no longer bearish on the Canadian dollar - 76 cents US sounds about right in these circumstances. 
• Thankfully for about 800,000 US federal employees and, quite frankly, the USA in general, the President decided to throw in the towel on the US federal government shutdown after he was played like a fiddle by Speaker Nancy Pelosi.  The reprieve may only be temporary, however, and in the absence of a new deal on "border security" (note quotation marks), the US government may yet be shut down again later this month.  As it is, the shutdown that just occurred likely shaved a few tenths of a point of Q1 GDP; we'll know for sure when the numbers roll in a little later. 
• More important to the economy and markets than the shutdown are the ongoing trade discussions between the US and China.  Hard to say how this will turn out but if the outcome is disappointing, buckle up. 
• The US seems to be proceeding with an extradition request for Huawei CFO Meng Wangzhou.  This obviously won't help Canada-China relations and we need all the good trade relations we can get right now.  
• Sidebar: with Canada mulling a Huawei ban similar to what's already been implemented in the US, Australia, and New Zealand, anybody else thinking that Nordic 5G equipment supplier competitors such as Ericsson and Nokia suddenly look interesting?  Hmmm. 
• The WTI-WCS price differential has really narrowed in recent weeks, prompting the Alberta government to taper off its production curbs earlier than scheduled, which may provide a bump for Canada's economic growth. 
• Ok, that's it for now - time to brave the cold and shovel the walk.  Stay diversified out there. 

Picture of the Day


The polar vortex descends upon the Paris of the Prairies.  Saskatoon, Saskatchewan. Copyright © 2013 Felix Choo / dingobear photography.  Photo available for licensing at Alamy Images. Photo may not be reproduced without permission. 

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