PrefBlog

TXPR set a new 52-week high today of 702.39, eclipsing the old mark of 701.82 set yesterday. CPD also set a new 52-week high.

There’s been a development in the Powell affair:

The Trump administration’s extraordinary criminal investigation of Federal Reserve Chair Jerome Powell is over, removing significant uncertainty that had been clouding the future of the world’s most important central bank.

Jeanine Pirro, the US Attorney for the District of Columbia, announced on X Friday she is closing the probe. In the investigation’s place, the Fed’s inspector general has agreed to scrutinize the significant cost overruns at the central bank’s ongoing multibillion-dollar renovation project at its Washington, DC, headquarters.

After the inspector general completes his report, Pirro said her office will review it and could restart its criminal probe if warranted.

In the meantime, the end of the investigation clears the way for Kevin Warsh, President Donald Trump’s pick to succeed Powell, to get confirmed for the role. Powell’s term helming the central bank is set to expire on May 15, and Warsh appeared before the Senate Banking Committee for a confirmation hearing earlier this week.

I’m not quite sure what to make of this. I think it’s improper if there has been a straight, explicit trade-off of the IG’s report for the DOJ probe. And there’s no guarantee that the IG’s report will be given any credence if it doesn’t align with Trump’s wishes.

On the other hand, there is no doubt that there has, in fact, been a big cost overrun in the renovation. Big enough to warrant a probe by the IG, although certainly not a criminal probe without a little more grounds for suspicion. After all, that’s what IGs are for, which is presumably why Trump fired so many of them.

I don’t know. There will be wheels within wheels on this one and I won’t pretend to have any kind of inside story.

I learned a little while ago that “wheels within wheels” is a biblical expression – Ezekiel 1:16:

The appearance of the wheels and their work was like unto the colour of a beryl: and they four had one likeness: and their appearance and their work was as it were a wheel in the middle of a wheel.

TXPR set a new 52-week high today of 701.82, eclipsing the old mark of 700.90 set yesterday.
ZPR & CPD also set new 52-week highs.

The TXPR price index set a new 52-week high today of 700.90, eclipsing the old mark of 700.70 set yesterday.

PerpetualDiscounts now yield 5.71%, equivalent to 7.42% interest at the standard conversion factor of 1.3x. Long corporates yielded 4.99% on 2026-4-22. Therefore the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”) has narrowed to 245bp from the 255bp reported April 15.

David Berman wrote a piece in the Globe today extolling preferred shares:

When you start constructing a portfolio that will generate cash in your retirement – or hey, you just like the idea of steady income today – preferred shares may be worth a look.

They beckon with yields north of 5 per cent, which is significantly better than current yields on government bonds and guaranteed investment certificates (GICs).

And when held in a taxable account, the distributions from preferred shares receive favourable treatment from the government.

Kevin Warsh had his confirmation hearing for the Fed chair today:

Kevin Warsh faced searching questions at his Senate confirmation hearing Tuesday. Democrats and even at times Republicans challenged his complicated finances, his relationship to President Donald Trump and what often seems like a wide-eyed endorsement of the promise of artificial intelligence. But one core issue for Warsh went all but unquestioned: his plan for what he calls “regime change” at the Federal Reserve.
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Warsh would break that status quo. He declined at the hearing to commit to continuing with regular press conferences, which the Fed has held since the financial crisis. He would abandon forward guidance, the Fed’s way of signaling to the markets where it wants interest rates to go. He would even move away from the Fed’s preferred measure of inflation, the core personal consumption expenditure measure, which he dismissed as a “rough swag as to what was going on” with prices. “We don’t have to do a rough swag any more.”

These ideas aren’t just window dressing for Warsh. They are how he brings down the long-term interest rates that trouble Americans in the form of higher mortgage and credit-card rates. Warsh believes markets have driven those rates up in response to muddled policy from the Fed, including the recent spike in inflation after Covid — but going much further back, too. The Fed, he argues, has lost credibility.

Well, he’s entitled to his opinions. But when I think of my mental list of American institutions that have lost credibility over the past fifteen months … the Fed ain’t there.

TXPR closed at 700.50, setting a new 52-week high, up 0.81% on the day. Volume today was 2.60-million, highest by far of the past 21 trading days.

CPD closed at 13.91, up 0.29% on the day. Volume was 49,790 (consolidated volume was 368,530), near the median of the past 21 trading days.

ZPR closed at 12.66, setting a new 52-week high, up 0.32% on the day. Volume was 103,580 (consolidated = 269,320), near the median of the past 21 trading days.

Five-year Canada yields were down to 3.05%.

Other markets did well:

The benchmark S&P 500 and the tech-heavy Nasdaq each rallied to their third record close in a row on Friday, while the blue-chip ⁠Dow marked ​its highest finish since late February, as investors cheered Iran’s decision to open the Strait of Hormuz and were optimistic it could reach an agreement with the United States. The TSX is now less than 200 points away from its own record closing high.

Iranian Foreign Minister Abbas Araqchi said in a post on X that passage for all commercial vessels through the Strait of Hormuz was “completely open” ​for the remainder of the 10-day truce between Israeli forces and ‌Iran-backed Hezbollah agreed to in Lebanon. This followed U.S. President Donald Trump’s announcement that talks could take place this weekend between Tehran and Washington and that they could soon secure a peace agreement to end the Iran war, which has left thousands dead since the U.S. and Israel launched joint strikes on Iran on February 28.

With traders increasingly confident ‌that an end ​to the war is near, U.S. ‌crude oil prices tumbled 11%, alleviating inflation concerns. The Strait of Hormuz is a vital waterway ​for global energy transportation.
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According ⁠to preliminary data, the S&P 500 gained 84.64 points, or 1.20%, ​to end at 7,125.12 points, while the Nasdaq Composite gained 363.57 points, or 1.51%, to 24,466.27. The Dow ⁠Jones Industrial Average rose 864.23 points, or 1.78%, to 49,442.95.

The S&P/TSX Composite Index closed up 0.86%, or 294.06 points, at 34,346.29, just below the record closing high of 34,541.27 on March 2. The drop in oil prices pressured energy shares, leading to TSX underperformance relative to the major U.S. indexes.

Remember the good old days, when you could triple the value of your company just by sticking a “dot-com” in your name? Well, happy days are here again!

Allbirds, the eco-friendly shoe brand that found its way onto the feet of tech CEOs and movie stars before falling on hard times, is pivoting to artificial intelligence.

On Wednesday, the San Francisco-based company said it had signed a definitive agreement with an unnamed institutional investor for US$50-million in financing to shift its business to AI infrastructure. It will also have a new name: NewBird AI. It plans to use the proceeds to purchase graphics processing units, known as GPUs. The transaction is expected to close during the second quarter of this year.

“The rise of AI development and adoption has created unprecedented structural demand for specialized, high-performance compute that the market is struggling to meet,” the company said in the release. “NewBird AI is being built to help close that gap.”
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Shares of Allbirds closed up 582 per cent at US$16.99. A few days ago, the stock was trading at US$3.

The posturing about Powell continues:

President Donald Trump said he will fire Federal Reserve Chair Jerome Powell if he does not step aside when his term at the helm of the central bank expires next month.

“Then I’ll have to fire him,” Trump told Fox Business’ Maria Bartiromo Wednesday in response to a question about Powell staying on at the Fed.

The timing of Powell’s departure from the Fed has been complicated by the Department of Justice’s criminal investigation into the Fed chair that accuses Powell of lying to Congress in testimony last year about the Fed’s $2.5 billion-dollar renovation of its Washington, DC, headquarters. It’s a subject the Trump administration has zoned in on as part of its repeated criticism of Powell’s leadership of the Fed.

Trump in January nominated former Fed governor Kevin Warsh to replace Powell, whose term leading the central bank expires on May 15. But North Carolina Republican Sen. Thom Tillis, a key member of the committee that approves Fed nominees, reiterated this week that he will not vote to confirm Warsh until the Powell probe has concluded.

The Trump administration doubled down on its support for the probe this week, despite the likelihood that it will delay Warsh’s nomination and could lead to a legal faceoff with Powell that could prolong Trump’s unwanted Fed chair to stay at the central bank

PerpetualDiscounts now yield 5.79%, equivalent to 7.53% interest at the standard conversion factor of 1.3x. Long corporates yielded 4.98% on 2026-4-15. Therefore the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”) has narrowed slightly (and perhaps spuriously) to 255bp from the 260bp reported April 8.
Note: This table was previously published reporting after-tax yields-to-worst. It has been replaced with this one, which reports pre-tax YTWs.