Full text of H.16 Capital Market Developments : October 19, 1970
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I f tf '• .»— v — o . « x DKOSTEOIIffl iwnmpronT.T.Tm 'AFTER SIX HOHTHS M05THS L.5.8 Confiden»M;(F.R.) OTEB SIX /\ >/CAPITAL (MARKED DEVELOPMENTS Capital Markets Section, Division of Research and Statistics, Board of Governors of the Federal Reserve System, Washington, D. C. I 6 * ^ 7 October 19. 1970 INDEX 3-5 Developments in the Corporate and Municipal Bond Markets 6-7 Capital Marl<eTYields 8-13 Capital Market Volume 14-17 Stock Market 18-33 Mortgage Market SYMBOLS: e Estimate p Preliminary r Revised n o. Not available TABLE 1: Yields, Volume and Reception YIELDS MOODY'S SEASONED 1 NEW ISSUE Aaa WEEK ENDING: 1970 - Sept. Oct. 4 11 18 25 8.40 8.52 8.50 8.35 8.13 8.13 8.09 8.06 511 372 305 812 74 97e 87 80 976 1,361 1,350 1,379 2 9 16 23 8.37 8.35 8.53 n.a. 8.05 8.02 8.00 495, 469 490 675e 70 81 89 iL a. 1,178 n.a. 1,237 YIELDS MOODY'S BOND BUYER SEASONED SEASONED 20 Aaa BOND INDEX WEEK ENDING: 1970 - Sept. Oct. CORPORATE BOND MARKET VOLUME 2 PER CENT GROSS SOLD BY END BONDS SCHEDULED OFFERINGS OF WEEK WITHIN 28 DAYS MUNICIPAL BOND MARKET VOLUME 2 GROSS OFFERINGS PER CENT SOLD BY END OF WEEK BONDS SCHEDULED WITHIN 28 DAYS 4 11 18 25 5.70 6.00 5.96 5.95 6.16 6.30 6.26 6.28 186 213 676 324 62 47 83 75 919 1,147 851 1,184 2 9 16 23 6.15 6.15 6.10 6.39 6.38 6.35 346 450 324 35 Oe 77 71 68 n.a. 1,516 1,148 1,138 .... 1 Derived by adjusting to a Aaa basis, new issues of publicly-offered corporate bonds with call protection, rated A, Aa, or Aaa by. Moody 1 s Investors Service (except serial and convertible issues, offerings of natural gas pipeline and foreign companies, and bonds guaranteed by the Federal Government,) 2 Millions of dollars unless otherwise indicated. Note: See footnotes to Table 3 TABLE 2: Details on Inventories DATE OFFERED CORPORATE BONDS IN SYNDICATE END OF LATEST WEEK ORIGINAL RATING A N D YIELD CALL PROTECTION COUPON ISSUER AMOUNT (MIL. $) 50.0 30.0 175.0 25.0 25.0 55.0 15.0 10.0 30.0 15.0 10/14 10/14 10/14 10/8 10/8 10/7 9/29 9/29 DATE OFFERED | RELEXSED 10/7 Dresser Indus. Rex Chain Belt Pacific Tel. & Tel. Morton-Norwich Texas Elec. So. Calif. Gas Montana Dak. Util. Wise. Mich Pwr. Central Tel. Elizabethtown Gas. 9 3/8 8.95 8 3/4 8.88 8.88 8.85 9 1/4 9 1/4 %9 1/4 9 1/4 9.38 8.95 8.76 8.88 8.73 8.85 9.15 9.15 9.35 9.32 ESTIMATED PROPORTION SOLD Baa \ 10 yrs A ' X 10 yrs Aaa 5 yrs 10 yrs A 5 yrs Aaa 5 yrs Aa 5 yrs A 5 yrs A 5 yrs a ; 5 yrs A 95% 95% 85% 95% 60% 50% 30% 30% 85% 50% CORPORATE BONDS RELEASED FROM SYNDICATE DURING LATEST WEEK ORIGINAL INCREASE RATING A N D ESTIMATED PROAMOUNT ISSUER COUPON IN YIELD CALL PROT. PORTION RELEASED YIELD 10/13 40.0 DATE 1970 - Sept. 18 25 2 Oct. 9 16p Conn. P. Sc L. INVENTORIES 1 MUNICIPALS BLUE LIST | IN SYNDICATE 571 618 607 645 620 201 197 151 202 177 8 7/8 8.75 Aa 5 yrs +12 50% CORPORATES IN SYNDICATE 41 153 179 95 93 N.G. - No call protection. All figures in millions of dollars. Blue List is dailyj average for week ended Friday, except for latest week of three days ended Wednesday. All other figures are as of Fridav. which is daily average BONDS IN SYNDICATE Millions of dollars Friday figures i i r i i i i i i i i i i CORPORATE BONDS IN SYNDICATE SEPT. r I I I I I I JUN. 1970 I I SEPT. TABLE 3: High Grade Bond Yields DATE NEW CORPORATE Aaa1 MOODY'S SEASONED CORPORATE Aaa2 U.S. GOVERNMENT 20-YEAR CONSTANT MATURITIES 3 /. BOND BUYER'S SEASONED MUNICIPALS4 1968 - High Low 7.02 (12/13) 6.13 (8/30) 6.55 (1/27) 5.95 (9/13) 5.90(1/20) 5.18(8/9) 4.85 (1/26) 4.07 (8.8) 1969 - High Low 8.84 (12/5) 6.90(2/21) 7.84 (12/26) 6.55 (1/13) 6.97 (12/26) 5.96 (1/24) 6.90 (12/18) 4,82 (1/28) 1970 - High Low 9.30 (6/19) 8.20 (2/27) 8.60 (7/3) 7.79(3/6) 7.55 (5/29) 6.60 (3/6) 7.12 (5/29) 5.95 (3/12) 25 8.35 8.06 6.77 6.28 2 9 16 8.37 8.35 8.53 8.05 8.02 8.01 6.81 6.79 6.85 6.39 6.38 6.35 1970 - Sept. Oct. 1 New corporate issues, with call protection, adjusted (as described in footnote 1 of Table 1) to a Aaa basis. 2 Weekly average of daily figures. Average term of bonds included is 22-24 years. 3 Weekly average of daily figures. 4 Thursday figures. The average rating of the 20 bonds used in this index ' falls midway between the four top groups as classified by Moody's Investors Service. Note--Highs and lows are for individual series and may be on different dates for different series. HIGH GRADE BOND YIELDS NEW CORPORATE Aaa MOODY'S V X CORPORATE Aaa U S. GOVT 20 YR. CONSTANT MATURITIES BOND BUYER MUNICIPAL 1966 1967 1968 1970 TABLE 4: Long-term Corporate and State and Local Government Security Offerings and Placements (In millions of dollars) GROSS PROCEEDS STATE AND LOCAL 2 PERIOD 1970 1969 1963 2,636 3,539 2.075 2,045 2,098 1,771 1,802 April May June 3,170 3,909 2,748 2.076 1,428 July August September 2,850e 2,550e 3,600e October November December January February March 1st 2nd 3rd 4th Quarter Quarter Quarter Quarter 1st half Three quarters Year 1970 1969 1,340 1,214 1,551 1,262 987 538 1,178 1,158 1,404 1,866 1,646 995 1,801 1,318 1,143 2,478 1,427 2,427 2,143 1,432 1,557 1,306 1,342 l,650e 1,097 808 559 1,469 1,699 1,444 4,000e 1,933 2,375 2,532 2,129 1,767 2,054 1,800e 1,280 886 816 2,230 1,021 1,115 7,977 10,468 9,OOOe 6,218 7,354 6,332 6,840 5,178 5,704 5,133 5,950 4,105 3,711 4,298e 2,787 3,648 2,464 2,982 3,840 3,856 4,612 4,366 18,445 27,445e 13,572 19,904 26,744 10,882 16,015 21,965 6,435 8,899 11,881 7,956 12,008 16,574 1,608 1,799 7,816 12,114e 1,110 737 1968 Excluding finance companies 3 1st 2nd 3rd 4th Quarter Quarter Quarter ^ Quarter Year 6,170 7,037 j 5,107 5,427 4,785 5,654 20,973 Securities and Exchange Commission estimates of gross proceeds. Investment Bankers Association of America estimates of principal amounts. Total gross proceeds excluding offerings of sales and consumer finance companies. , i TABLE 5: New Corporate Security Issues, Type of Issue and Issuer (In millions of dollars) QUARTER OR MONTH GROSS PROCEEDS BY TYPE OF ISSUE COMMON BONDS _ i AND MEMO: TOTAL. PUBLICLY PRIVATELY PFD. ISSUES INCLUDED MFG. OFFERED PLACED STOCK FOREIGN | CONVERTIBLE GROSS PROCEEDS.BY TYPE OF ISSUER PUBLIC UTILITY COMMUNICATIONS OTHER ISSUERS 1 7,354 6,332 6,840 3,411 3,186 3,479 1 673 1 347 1 ,053 2 268 1 ,797 2 ,307 277 289 115 1,126 750 809 1,,773 1,,862 1.,314 1,878 1,544 1,967 432 684 598 3,266 2,243 2,961 7,977 10,468 9,025 4,577 6,994 5,975 1,,235 1 ,282 1 ,300 2 ,147 2 ,190 1 ,750 222 135 922 710 260 2.,584 2 ,445 2,,550 2,085 2,812 2,620 766 2,162 1,280 2,543 3,048 2,425 1969 - Sept. Oct. Nov. Dec. 2,427 1,933 2,375 2,532 1,222 969 1,164 1,346 479 313 226 514 726 651 984 672 35 59 8 48 369 105 303 401 625 260 453 601 544 745 622 600 272 120 201 277 984 808 1,099 1,054 1970 - Jan. Feb. Mar. , Apr. May June July e/ Aug .. - 2,636 1,802 3,539 3,170 3,909 3,389 2,648 2,550 1,595 1,068 1,914 2,022 3,041 1,931 1,831 1,750 516 266 471 447 399 436 236 525 468 1 ,154 701 468 1 ,021 580 639 540 906 1,109 600 1,103 842 600 Sept.—' 3,600 2,400 n.a. 100 811 357 1 ,416 689 817 939 577 850 900 952 680 911 1,310 744 994 1,085 400 700 387 249 286 398 230 82 107 60 234 226 306 62 1,747 353 144 400 500 61 . 33 128 89 20 26 68 n.a. 375 755 725 750 1969 - II III IV 1970 - I He Ille 1 1,195 Other issuers are extractive, railroad and other transportation, real estate and finance, and commercial and other. '• " Source: Securities add Exchange Commission. Quarterly supplements are available. T A B L E 6: Large Long-term Public Security Issues for New Capital (Other than U.S. Treasury) 1 I Oct, 1 thru Oct. 16, 1970 TYPE ' COUPON RAT I! OR Ni:i l'.JTERI". ST COST AMOUNT (MILLIONS OF DOLLARS) OFFERING YIELD MOODY 1; RAT INC, Corporates American Elec. Power First Denver Mtg. Investors Jersey Central Pwr. & Lt. Co. United Utilities, Inc. Mass. Mutual Mtg. & Realty Investors com. stk. benf. int. cum. pref. stk. cum. stk. 99.5 30.0 25.0 33.8 conv. sub. debs. 50.0 debs. 50.0 Otis Elevator Co. 1st. Mtg. 15.0 Montana-Dakota Utilities Co. 1st. Mtg. 55.0 Southern Calif. Gas. Co. 1st. Mtg. 25.0 Wisconsin Pwr. & Lt. Co. debs. Weyerhaeuser Co. 150.0 notes Weyerhaeuser Co. 50.0 *Public Service Elec. & Gas Co. com. stk. 67.9 1st. Mtg. Connecticut Lt. & Pwr. Co. 40.0 pref. stk. 20.0 Connecticut Lt. & Pwr. Pacific Tel. & Tel. Co. .Morton-Norwich i Cummins Engine Co. Texas Electric Ser. Co. Dresser Industries Inc. Rex Chainbelt Inc. Carolina Pwr. & Lt. Co. Clark Equipment Co. General Mills Inc. debs. 175.0 debs. 25.0 debs. 30.0 bds. 25.0 S.F. debs. 50.0 S.F. debs. 30.0 "cum. stk. 28.8 debs. 50.0 S.F. debs. 100.0 —— • — — •- — 1990 1995 1990 1995 2000 2000 1976 —— •- -- 6, 75 6.,50 9.,25 8..85 8,,88 8,.63 8,.13 6.,75 6,,50 9,,15 8,.85 8,.85 8,.63 8,.13 -- Baa A Aa Aa A A -- -- -- *— 2000 8 .88 8 .75 Aa — -- -- —— 2Q06 1995 1995 2000 1995 1995 8,,75 8,,88 8.,88 8., 88 9.,38 8.,95 8,,76 8,,88 9.,00 8.,73 9..38 8..95 Aaa A A Aaa Baa A -- -- 1976 1995 8,.80 8..88 -- 8..80 8,,87 — A TABLE 6: Large Long-term Public Security Issues for New Capital (Other than U.S. Treasury) 1 Oct. 1, thru Oct. 16, 1970 1 ISSUER TYPE 2 AMOUNT (MILLIONS OF DOLLARS) MATURITY COUPON 1 RATE OR ' OI-TKRNET INTER-• ; i;.c EST COST J Xl1^0 MOODY'S RATING State and Local Hudson County, H.J. Alaska State Housing Auth. Maryland, State of Coastal Industrial Wtr. Auth. Texas University of Houston, Texas Minneapolis, Minn. Shelby County, Tenn. Alexandria, Va. Anne Arundel Co., Md. Atlanta, Ga. Tacoma, Wash. Alabama Highway, Auth. California, State of G.O. Rev. G.O. St. Louis, M o . Los Angeles Co. Flood Control District Calif. Genesee Co. Comm. Coll. Mich. Hawaii Co., Hawaii Fort Worth, Tex. Jacksonville, Fla. Penna State of Snohomish, Co. PuD#l, Wash. Seattle Dept. Light & Power El Paso, Texas 11.1 29.0 42.1 1971-1988 1972-85 1973-85 7.28 6.77 5.29 4.75-7. 40 4.75-7. 25 4.00-5.90 S.F. Rev. 17.0 Rev. 10.0 G.O. 10.6 G.O. 12.5 G.O. 13.1 G.O. 14.0 Rev. 20.0 Rev. 25.0 Rev. 25.0 G.O. 100.0 2007 1973-2000 1971-90 1971-95 1971-87 1971-2000 1972-2000 1973-2007 1971-87 1971-90 7.06 7.11 4.79-5,,64 5.82 5.65 6.14 7.43 7.20 6.35 5.57 7.08 4.70-7.25 3.95-6.25 3.90-6. 70 4.00-6. 65 4.75-7. 70 4.80-7. 35 4.10-7. 00 3.85-6.30 Rev. 10.0 1972-05 7.66 4.50-7.60 Baa G.O. G.O. G.O. G.O. \ Rev.\ G.O. G.O. Rev. G.O. 10.0 11.5 10.0 10.3 52.0 50.0 24.0 20.0 10.0 1972-95 1972-1995 1973-90 1971-95 1972-02 1973-00 1977-2004 1973-2005 1972-1990 5.69 6.29 5.88 5.57 7.17 6.33 6.88 7.18 5.58 3.80-6.20 4.00-7.00 5.20-6. 65 3.70-6.40 4.40-7.35 4.15-6. 60 5.00-7. 20 4.50-7. 25 4.00-6.25 — Baa Aaa A-l A Aaa Aa A A Baa Baa-1 A Aa — A Aa A A-l Aa A A-l V TABLE b: Large Long-term Public Security Issues for New Capital (continued) (Other than U.S. Treasury) 1 Oct. 1 thru Oct. 19, 1970 ISSUER AMOUNT (MILLIONS OF DOLLARS) COUPON RATE OR NET INTEREST COST OFFER na; YIELD MOODY 1 S RATING 8.70 7.20 Aaa Other Inter-American Development BK Federal Home Loan Banks bds. 100.0 Con. bds.450.0 1995 8.63 7.20 Rights offering. Includes corporate and other security offerings of $15 million and over; State and local security offerings of $10 million and over. In case of State and local government securities, G.O.. denotes general obligation; Rev.-Ut., revenue obligations secured only by income from public utilities; Rev.-Q.-lit., revenue bonds secured only by income from quasi-utilities; Rev.-S.T., revenue bonds secured by revenue from specific taxes only; Rev.-Rent., revenue bonds secured solely by lease payments. Includes foreign government and International Bank for Reconstruction and Development issues and non-quaranteed issues by Federal Agencies. TABLE 7: Forthcoming Large Long-term Public Security Offerings for New Capital (Other than U.S. Treasury) 1 (continued) As o f O c t o b e r 16, 1970 ISSUER TYPE AMOUNT (MILLIONS OF DOLLARS) APPROXIMATE DATE OF OFFERING Corporate Continental Investment Corp. Debs 1st mtg Massachusetts Elec. Co. New Jersey Natural Gas 1st mtg GAC Properties Credit Inc. Debs Pan American World Airways Gtd loan ctfs Appalachian Pwr Co. 1st mtg *Skelly Oil Debs Singer Co. Debs Xerox Corp. Debs Wisconsin Gas Co. Debs Vermont Yankee Nuclear Pwr Co. 1st mtg Sears, Roebuck & Co. Notes Sears, Roebuck & Co. S.F. debs Pitney-Bowes Inc. Debs First Mtg Investors Debs Ford Motor Credit Co. Notes Ford Motor Credit Co. Debs Beneficial Corp. Debs Genesco Inc. Notes Mississippi River Transmission Corp. Debs Mountain States Tel & Tel Co. Debs Southwestern Pub. Serv. Co. 1st mtg Illinois Pwr Co. 1st mtg Northern Natural Gas Co. Debs Michigan Wis. Pipe Line Co. Bonds Equitable Life Trust Conv debs Equitable Life Trust Conv debs General Pub Utilities Debs General Pub Utilities Debs Toledo, Edison Co. 1st mtg Gulf Oil Bonds 1st mtg Louisiana Pwr General Tel Co. of the N. W. Bonds Florida Pwr Corp. 1st mtg Portland General Elec Co. 1st mtg Cleveland Elec Illuminating Co, 1st mtg Consumers Pwr Co. 1st mtg 1st mtg Public Service Co. of N.H. 1st & ref mtg Pacific G & E Co. 1st mtg Citizens Utilities Co. 1st mtg Cincinnati Gas & Elec Co. Debs Public Serv. Elec & Gas 1st mtg •Columbus & So. Ohio Elec Co. Debs Dow Chemical Co. 1st & ref mtg Southern Calif. Edison Co. 1st mtg New York Telephone Co. 30.0 20.0 15.0 50.0 81.5 70.0 25.0 100.0 155.0 15.0 80.0 125.0 125.0 50.0 30.0 125.0 75.0 75.0 50.0 October October October October October October October October October October October October October October October October October October October 35.0 150.0 15.0 35; 0 60.0 40.0 50.0 50.0 20.4 58.0 35.0 200.0 20.0 15.0 40.0 20.0 75.0 50.0 75.0 100.0 23.0 60.0 75.0 25.0 150.0 100.0 200.0 October October October October October October October October October October October November November November November November November November November November November November November November November December December 19 19 19 19 19 20 20 21 21 (rgts expire) 21 21 22 22 22 22 26 26 27 27 27 27 27 28 28 29 2 4 5 5 5 9 10 12 16 18 18 18 19 3 3 TABLE 7: Forthcoming Large Long-term Public Security Offerings for New Capital (Other than U.S. Treasury)' ^ 1 6 j TYPE ISSUER AMOUNT (MILLIONS OF DOLLARS) 1 9 7 0 APPROXIMATE DATE OF OFFERING t State and Local Texas, State of Chicago Pub Bldg Coram 111. Cleveland, Ohio New York City Oklahoma, State of St. Paul ISD #625, Minn. Grays Harbor^Co. Wash. Pub Util. District # 1 Houston, Tex. North Broward Hosp. Dist. Fla. Ndrth Texas State University Albany^Co. N.Y. Miami, Fla Puerto Rico Highway Auth. Louisiana Memphis, Term. *N. Y. State Job Devel. Auth. Seattle Maine Houston, Tex. N. Y. State D o r Auth. Fairfax, Va." *Pittsburgh, Pa. Philadelphia S/D Pa. Detroit City S/D, Mich. *Dallas-Ft. Worth Reg. Arpt. Tex. Springfield, 111. G.O. G.O. G.O. G.O. Bonds G.O. 20.0 52.0 39.5 233.8 26.1 10.3 October October October October October October Rev Rev G.O. Rev G.O. G.O. G.O. G.O. G.O. Bonds G.O. G.O. Rev G.O. G.O. G.O. G.O. G.O. Rev Rev 10.0 10.0 10.0 10.0 70.0 12.5 50.0 25.0 34.0 25.0 23.2 14.6 35.0 14.2 40.0 10.5 45.4 30.0 50.0 14.0 October October October October October October October October October October October October October October October October November November November November *Illinois State Toll Hwy Auth. Los Angeles Dept. of Wtr & Pwr G.O. Rev 135.0 39.0 Nassau, Co. N. Y. San Francisco, Calif. Los Angles Harbor Dept. Calif. Sacramento Municipal Utility Dist., Calif. G.O. G.O. Rev 41.2 52.9 16.0 December 9 * December 14 • December 1 6 * Rev 50.0 January 20 130.8 315.0 October October 28 30 19 t 19 19 i 20 ' 20 j 20 i 20 21 21 21 21 22 22 27 27 27 27 27 28 28 28 29 4 9 i io; 10 < November 17 November 18 i Other HAA Federal^Home Loan Mtg Corp. * 1 2 Bonds Bonds Included in table for first time. . Includes corporate and other issues of $15 million and over; State and local Government issues of $10 million and over. Includes foreign government and International Bank for Reconstruction and Development issues and non-guaranteed issues of Federal Agencies. TABLE 8: Stock Prices and Volume TRADING VOLUME 2 STOCK PRICES 1 500 1968 • High Low D.J. - IND. NYSE AMEX 108.37(11/29) 985.21(12/13) 87.72(3/5) 825.13 (3/21) 33.24(12/20) 21.97(3/25) 1 AMEX 82.61(6/7) 34.0(2/23) 45.4(6/7) 14.1(2/23) 1969 - High Low 106.16(5/14) 968.85(5/14) 32.91(1/3) 89 . 20 ( 7/17) 769 . 93(12/17) 25.02(7/29) 82.6(10/17) 32.8(4/4) 38.4(5/9) 12.9(4/4) 1970 - High Low 93.46(1/5) 811.31(1/5) 69.29(5/26) 631.16(5/26) 80.7(5/26) 35.1(7/3) 28.4(1/2) 8.3(7/3) 1970 - Sept. 25 83.97 Oct. 2 85.16 9 85.08 16 84.28 27.02(1/8) 19.36(5/27) 76$.. 77 22.34 83.4 26.4 766.16 768.69 763.35 22.79 22.63 22.39 72.2 84.1 50.5 23.5 22.7 13.7 1. Figures other than highs and lows are Fridays only, for the year and are not necessarily for Fridays. 2. 1941-43 = 10. 3. Average dollar value of shares listed. 4. NYSE is the New York Stock Exchange; AMEX is the American Stock Exchange. Total number of shares traded per week (millions of shares). Trading is normally conducted for 5-1/2 hours per day and 5 days per week, or 27-1/2 hours per week. In recent years, however, abbreviated trading to the extent, and over the time periods, shown below; From: Through: August 8, 1967 January 22, 1968 June 30, 1968 January 3, 1969 July 7, 1969 January 2^ 1970 August 20, 1967 March 1, 1968 December 31, 1968 July 3, 1969 December 31, 1969 May 1, 1970 Hours/ Day 4 4 5-1/2 4 4-1/2 5 Highs and lows are Days/ Week 5 5 4 5 5 5 Hours/ Week 20 20 22 20 22-1/2 25 STOCK PRICES AND TRADING VOLUME AM EX 36 D.J. (Ind.) Weekly I STOCK PRICES 1 1 1 1 1 i - 1 1 ' ' 1 , I I I I II i I I i i AMEX PRICE LEVEL INDEX A / 1 32 - 28 - J S&P's 500 \y - 1120 112 ~ 1040 104 \ \ A A 16 12 - f\j W U \ / DJ. IND. 1280 128 1200 120 24 - 20 \ K. w\A V U y W j 8 _ 960 96 - 880 88 - 800 80 720 72 Millions of shares AMEX TRADING VOLUME (TOTAL FOR WEEK) Tp : NYSE TRADING VOLUME (TOTAL FOR WEEK) 1966 1967 I S&P (500) I I I I i I I I I I I I I I I I I I I I I 1970 17 TABLE 9: Security Credit END OF PERIOD CREDIT EXTENDED TO MARGIN CUSTOMERS BY: BROKERS 1 | BANKS 2 | TOTAL CUSTOMERS' NET DEBIT BALANCES NET CREDIT CUSTOMERS' NET EXTENDED BY BROKERS AND FREE CREDIT DEALERS 3 BALANCES Outstanding: 1969--Aug. Sept. Oct. Nov. Dec. 5,000 4,940 5,040 5,070 4,970 2,670 2,620 2,570 2,520 2,580 7,670 7,560 7,610 7,590 7,550 7,019 7,039 7,243 7,111 7,445 2,577 2,579 2,753 2,613 2,803 4,442 4,460 4,490 4,498 4,642 1970—Jan. Feb. Mar. Apr. May June . July Aug. 4,6804,570 4,520 4,360 4,160 3,860 3,790 3,780 2,430 2,370 2,370 2,330 2,290 2,290 2,290 2,300 7,110 6,940 6,890 6,690 6,450 6,150 6,080 6,080 6,683 6,562 6,353 5,985 5,433 5,281 (4) (4) 2,626 2,563 2,441 2,248 2,222 2,009 2,180 2,077 4,057 4,099 3,912 3,724 3,211 3,272 (4) (4) (5) Change in Outstanding: 19 69--June July Aug. Sept. Oct. Nov. Dec. -330 -170 -170 -60 100 30 -100 -30 -40 -30 -50 -50 -50 60 -360 -210 -200 -110 50 -20 -40 -260 -699 . -496 20 204 -132 334 1 -302 -206 2 174 -140 190 -261 -397 -290 18 30 8 144 1970--Jan. Feb. Mar. Apr. May June July Aug. -290 -110 -50 -160 200 -300 -70 -10 -150 -40 -440 -170 -50 -200 240 -300 -70 -762 -121 -209 -368 -552" -152 -177 -163 -22 -193 -26 -213 171 103 -585 42 -187 -188 -513 -61 2 3 —— -40 -40 --- 10 -- Margin debt, as reported by the New York Stock Exchange. Although margin debt until March 1968 included loans secured by U.S. governments, the amount of such loans included is thought to have been small. "Bank loans to others than brokers and dealers for purchasing or carrying securities other than U.S. governments." The difference between customers' net debit balances and customers' net free credit balances, this figure represents the net credit extended by brokers and dealers to the nonfinancial public. NOTE: With the exception of bank loan data, figures are supplied by the New York Stock Exchange and are end of month data. Bank loans are for weekly reporting large commercial banks. Broker data includes loans for regulated securities; bank data includes loans for the purpose of purchasing or carrying any security, whether regulated or not. TABLE 10: Savings Flows at Nonbank Depositary Intermediaries ($ millions) DATE MUTUAL SAVINGS BANKS NET REGULAR DEPOSITS 3 NEW ANNUAL MONEY 2 GROWTH NET 1 FLOW RATE SAVINGS < St LOAN ASSOCIATIONS NET SHARE CAPITAL NEW ANNUAL MONEY2 NET GROWTH 1 FLOW RATE TOTAL DEPOSITS ANNUAL NET GROWTH RATE 1 FLOW NET NEW MONEY 2 \ 5,082 4,208 2,551 1967 1968 1969 1969 - 1970 - July Aug. Sept. July Aug. e./ Sept. el/ -164 95 303 297 176 500 9.3 7.1 4.0 — -- -- —— — 2,376 1,143 -747 -266 24 -269 174 81 n.a. Not Seasonally Adjusted 6,129 10,649 9.4 2,738 6.0 7,399 4,020 3.1 -1,003 15,371 11,607 6,571 -1,122 -25 -104 -1,274 87 1,182 485 517 n.a. 840 732 2,226 -1,110 -8 879 -- 543 556 1,726 -- — — — — 9.4 6.3 3.4 8,505 3,881 -1,750 / 1,388 -1 -373 -- 659 598 n.a. Seasonally adjusted 1970 - Apr. May June July Aug. e / Sept.2/ 371 360 373 441 279 343 1 2 6.6 6.4 6.6 7.8 4.9 6.0 — -— — — 973 637 891 1,680 791 1,288 8.6 5.6 7.8 14.6 6.8 11.0 — — — --- 1,344 997 1,264 2,121 1,070 1,631 8.0 5.9 7.4 12.4 6.2 9.4 • — • — — — -- Annual growth rate for monthly data is the annualized monthly percentage increase in deposits. Net New Money is new deposits net of both withdrawals and interest. Data for S&Ls are for insured associations only, which represent 96% of industry total resources. 3 Regular deposits at mutual savings banks exclude items such as Christmas club and certain escrow accounts, which represent a very small part of total deposits. | SOURCE: National Association of Mutual Savings Banks and Federal Home Loan Bank Board. SAVINGS FLOWS (seasonally adjusted) [ M i l l i o n s of d o l l a r s Monthly \— 2000 1600 TOTAL 1200 800 400 400 1200 SAVINGS I LOANS 800 400 400 800 MUTUAL SAVINGS BANKS 400 400 1966 1967 1968 1969 1970 i TABLE l l : DATE TOTAL Mortgage Commitments at Selected Thrift Institutions OUTSTANDING COMMITMENTS . ALL MUTUAL , SAVINGS SAVINGS & BANKS LOAN (N.Y. STATE) ASSOCIATIONS | | TOTAL 1 NET CHANGE ALL i SAVINGS & LOAN / ASSOCIATIONS (Billions of Dollars, Se asonally Adjusted) MUTUAL SAVINGS BANKS (N.Y. STATE) 1/ 369 - July Aug. Sept. Oct. Nov. Dec. 9.9 9.5 9.2 8.9 8.6 8.4 6.8 6.5 6.4 6.1 5.9 5.8 3.1 3.0 2.8 2.7 2.7 2.6 -.32 -.36 -.31 -.33 -.24 -.25 -.22 -.24 -.18 -.23 -.18 -.12 -.10 -.12 -. 13 -.09 -.06 -.13 970 - Jan. Feb. Mar. Apr. May June July 8.2 7.9 7.6 7.8 8.0 8.2 8.6 5.6 5.4 5.2 5.4 5.8 6.1 6.5 2.6 2.5 2.5 2.4 2.2 2.1 2.0 -.17 -.30 -.26 .13 .24 .22 .35 -122 -.23 -.21 .26 .38 .30 .40 .04 -.07 -.05 -.13 -.14 -.09 -.05 1 Based on data from Federal Home Loan Bank Board and Savings Banks Associations of New York State. Net changes are derived directly from unrounded outstandings levels"as reported and after seasonal adjustment by Federal Reserve. Subtotals may not add to totals because of rounding. Mutual Savings Banks and total data include building loans beginning August 1967. t MORTGAGE COMMITMENTS OUTSTANDING (seasonally adjusted) Monthly Billions of dollars TOTAL S&L'S N.Y.-MSB'S includes building loans beginning August 1967 1960 1962 1964 1966 1968 1970 22 TABLE 12: Net Change in Mortgage Holdings 1 DATE FINANCIAL INSTITUTIONS MUTUAL SAVINGS & SAVINGS COMMERCIAL LOAN BANKS BANKS ASSOC. TOTAL INCLUDING FNMA-GNMA LIFE INSURANCE COMPANIES FNMA-GNMA. Not Seasonally Adjusted 1966 1967 1968 1969 1969 - May June July Aug. .1970 - May June July Aug. 1969 - July Aug. Sept. Oct. Nov. Dec. 15,782 18,219 21,273 19,676 4,705 4,639 6,677 5,535 2,385 1,976 2,163 575 2,'lf! i:iii 400 1,256 1,932 200 1,626 200 200 18,105 20,016 23,781 24,051 2,161 1,634 2,32 9 2,089 600 200 400 2,720 3,153 2,787 3,761 7,520 9,350 9,407 4,596 2,907 2,459 2,052 2,323 1,797 2,508 4,375 233 230 215 181 988 1,2X6 155 142 115 171 185 222 293 528 189 183 187 378 397 463 399 173 193 191 171 139 134 334 530 511 568 583 614 2,682 144 221 160 182 Seasonally Adjusted 1,698 1,910 1,876 1,734 1,652 1,906 1.364 1,380 1.365 1,166 1,069 1,292 151 310 383 244 237 347 181 157 137 124 146 235 865 844 723 1,128 1,079 1,111 859 720 654 627 547 576 556 225 400 24 288 937 1,493 1970 - Jan. 499 241 436 143 285 1,105 1,604 Feb. 516 125 276 197 144 712 1,228 . Mar. 494 189 357 205 141 892 1,386 Apr. 418 196 588 160 133 1,066 1,484 May 454 220 225 935 1,649 269 2,103 June 245 506 128 1,075 1,599 2,105 151 July 398 985 158 110 Aug. 1 Monthly data for commercial banks based on Federal Reserve estimates benchmarked to Call Report data on real estate loans outstanding as available. Other data derived from mortgage debt outstanding as reported separately by National Assn. of Mutual Savings Banks, Federal Home Loan Bank Board, Institute of Life Insurance and, through August 1968, the Federal National Mortgage Association, and thereafter by FNMA and the Government National Mortgage Association. Data for mutual savings banks and for Life Insurance companies may differ somewhat from those derived from regular quarterly series because of minor conceptual differences for which adjustments are not made in the monthly series. Altogether, these groups accounted for 87 per cent of the net increase estimated for all holders in 1967. 23 NET CHANGE IN MORTGAGE HOLDINGS (seasonally adjusted) Monthly Billions of dollars 3.0 TOTAL, INCL. FNMA - GNMA 2.0 FINANCIAL INSTITUTIONS \ 1.5 1.0 1967 1968 1969 1970 TABLE 13: Net Increases in Mortgage Debt Outstanding Billions of dollars, SAAR ' QUARTER TOTAL RESIDENTIAL 3 1- to 4FAMILY MULTIFAMILY COMMERCIAL 1 MULT1-AND COMMERCIAL FARM 1966 - IIIp IVp 18.7 15.2 11.0 9.2 8.4 7.0 2.6 2.1 5.5 4.2 8.2 6.2 2.2 1.8 1967 - Ip up IIIp IVp 15.6 20.5 27.0 27.5 10.0 13.8 19.6 19.9 6.8 10.5 15.7 16.0 3.2 3.4 3.9 3.9 3.8 4.9 4;9 4.9 7.2 8.2 8.7 8.8 1.8 1.8 2.5 2.7 1968 - Ip HP IIIp 27.1 25.9 26.5 18.4 18.0 18.2 15.4 14.8 14.6 3.0 3.2 3.5 6.3 5.7 6.5 9.4 8.9 10.1 2.3 2.2 1.8 1969 - Ip IIP IIIp IVp 30.4 28.5 27.0 25.6 22.1 21.2 19.9 18.6 17.9 16.5 15.2 13.1 4.2 4.7 4.7 5.5 6.1 5.0 5.3 5.8 10.3 9.6 10.0 11.3 2.2 2.3 1.8 1.3 1970 - Ip lip 20.3 23.8 14.0 17.5 9.3 11.9 4.8 5.5 4.9 4.7 9.6 10.2 1.5 1.6 - 1 2 3 Derived from data oil mortgage debt outstanding from Federal Deposit Insurance Corporation, Federal Home Loan Bank Board, Institute of Life Insurance, National Association of Mutual Savings Banks, Departments of Commerce and Agriculture, Federal National Mortgage Association, Federal Housing Administration, Veterans Administration and Comptroller of the Currency. Separation of nonfarm mortgage debt by type of property, where not available, and interpolations and extrapolations, where required, estimated mainly by Federal Reserve. May differ somewhat from related flow of funds series mainly because of more aggregative type of seasonal adjustment. Residential mortgage debt i n d u e s nonfarm only and is-sum of 1-to 4 - family and multifamily mortgage debt combined. NET INCREASES IN MORTGAGE DEBT OUTSTANDING Quarterly Billions of dollars, seasonally adjusted annual rate TOTAL TOTAL RESIDENTIAL 1-4 FAMILY COMMERCIAL MULTIFAMILY 1966 1968 1970 TABLE 14: FNMA Weekly " A u c t i o n " Results WEEK ENDED COMMITMENTS IN $ MILLIONS IMPLICIT YIELD 2 (per cent) ACCEPTED 1-YEARll 90TOTAL TOTAL 6901-YEAR 1 6 MONTH & OVER OFFERED DAY DAY & OVER MONTH June 1 15 29 224.2 249.7 156.3 113.8 127.9 98.9 31.1 34.2 30.6 71.4 86.7 56.5 11.3 7.0 11.8 9. 20 9. 27 9. 32 9. 24 9.30 9. 33 9.27 9.31 9.34 July 13 27 286.2 323.8 113.3 150.4 25.0 37.0 73.0 91.1 15.3 22.3 9.,20 9,,10 9. 21 9. 12 9.22 9.12 Aug. 10 24 441.3 575.0 180.2 215.1 41.4 48.8 91.0 124.4 A?.8 41.9 . 9..03 9.,03 9. 03 9.,03 9.04 9.03 Sept . 8 21 384.2 207.8 200.1 195.3 45.6 40.1 117.0 121.5 37.5 33.7 9 .06 9,.01 9..04 9..01 9.04 9.02 Oct. 5 19 267.5 62.2 (105) (150)3/ 73.1 14.5 8,.90 8. 92 8.97 Note: Under the FNMA auction system, approved sellers of Governmentunderwritten mortgages bid for FNMA forward purchase commitments, subject to an over-all dollar limit announced by FNMA in advance. Bids accepted by FNMA are for delivery at the seller's option, and at any time within the specified period. Bids on proposed homes relate to construction not yet started on which mortgages may be delivered only after completion and occupancy. 1 For "proposed construction" of new homes only. 2 Average secondary market yield after allowance for commitment fee and required purchase and holding of FNMA stock, assuming prepayment of 15 years for 30-year Government-underwritten mortgages. Yields shown are gross, before deduction of 38 basis points fee paid by investors to servicers. Prior to August 10, 1970 the servicing fee was 50 basis points. FNMA announced limit of accepted bids for next week's auction. 27 FNMA "AUCTION" RESULTS $ Millions 200 AMOUNT OF ACCEPTED BIDS BY COMMITMENT PERIOD 150 6 MONTHS 100 . 1 YEAR AND OVER 50 IMPLICIT YIELD ! 6 - M T N T H COMMITMENTS : / i i i i i i i i i i i $ Millions - — TOTAL BIDS RECEIVED K 1 - 800 — 600 J\ 400 200 | | JUNE | TOTAL BIDS ACCEPTED AUG. OCT. 1969 DEC. i I FEB. I -1 APR. i JUNE 1970 i i i AUG. i i OCT. 0 i DEC. TABLE 15: Private Housing Starts and Permits STARTS DATE SEASONALLY ADJUSTED ANNUAL RATE TOTAL 1-FAMILY 2 OR MORE TOTAL UNADJUSTED TYP E OF FINANCING FHA VA OTHER 1969 - Aug. Sept. Oct. Nov. Dec. 1,376 1,481 1,390 1,280 1,402 752 828 766 762 776 624 653 624 518 626 124.9 129.3 123.4 94.6 84.1 22.4 18.3 254 18.6 23.2 4.2 4.8 5.0 3.9 4.2 1970 - Jan. Feb. Mar. Apr. May June July Aug. p Sept.p 1,059 1,306 1,392 1,224 1,242 1,393 1,503 1,412 1,504 577 725 708 697 728 835 827 830 884 482 581 684 527 514 558 776 582 620 66.4 74.3 114.7 128.4 125.0 135.2 140.8 127.4 130.8 16.5 17.5 25.2 32.4 37.1 40.7 43.4 34.1 i 3.4 3.9 4.8 5.4 5.2 5.1 5.3 5.7 n.a. 1 2 98.3 106.2 93.3 74.7 57.9 46.5 52.9 84.7 90.6 80.8 89.4 92.1 87.7 n.a. BUILDING PERMITS (SEASONALLY ADJUSTED ANNUAL RATE) 2 1,245 1,201 1,183 1,191 1,239 1,013 1,137 1,099 1,263 1,321 1,306 1,275 1,326 1,368 Total starts are Census estimates including farm for both permit-issuing and non-issuing areas. A dwelling unit is started when excavation begins; all units in an apartment structure are considered started at that time. FHA and VA starts are units started under commitments by these agencies to insure or guarantee the mortgages. As reported by FHA and VA, a unit is started when a field office receives the first compliance inspection report, which is made before footings are poured in some cases but normally after the foundations have been completed. Other starts are derived as a residual, although total and FHA and VA starts are not strictly comparable in concept or timing; other starts include both units financed by conventional mortgages and units without mortgages. Building permits before January 1963 are Census estimates for about 10,000 areas identified as having a local building permit system in 1959. Estimates beginning 1 January 1963 are for approximately 12,000 and beginning January 1967 13,000, or all known permit-issuing places. Unlike starts, seasonally adjusted building per- 1 mits reflect direct adjustment for differences in the number of working days per month, as well as other differences in timing and coverage. PRIVATE HOUSING STARTS AND PERMITS Monthly, annual rates Millions of units SEASONALLY ADJUSTED 2.0 HOUSING STARTS 1.6 1.2 BUILDING PERMITS (in issuing areas) PER CENT OF UNADJUSTED TOTAL STARTS MULTI-FAMILY (2 or more) GOVERNMENT UNDERWRITTEN 1964 1966 1968 1970 TABLE 16: Mortgage and Bond Yields FHA . MORTGAGES 2 DATE 25-YEAR 30-YEAR CONVENTIONAL MORTGAGES 3 SPREAD BETWEEN YIELDS ON CONV. & FHA MORTGAGES 1 NEW Aaa CORPORATE BONDS 4 SPREAD BETWEEN YIELDS ON NEW CORPORATE BONDS AND FHA MORTGAGES 1959-60 - High 1961-66 - Low 1966 - High 1967 - High - Low 1968 - High Low 1969 - High Low 6.26 5.43 6.73 n.a. n. a. n.a. n.a. n.a. n.a. n.a. 5^44 6.81 6.81 6.29 7.52 6.78 8.62 7.99 6.30 5.80 6.70 6.70 6.40 7.40 6.75 8.35 7.55 .23 .25 .30 .11 -.12 .12 -.27 .40 .13 5.25 4.41 5.82 6.51 5.18 6.79 6.15 8.75 6.91 1.69 .77 1.16 1.28 .27 1.20 .26 1.08 -.13 1970 - Apr. May June July Aug. n.a. n.a. n.a. n.a. n.a. 9.10 9.11 9.16 9.11 9.07 8.55 8.55 8.55 8.60 8.60 -.55 -.56 -.61 -.51 -.47 8.60 9.10 9.11 8.63 8.48 .50 .01 .05 .48 .59 1 2 3 4 Neither mortgage nor bond yields include allowance for servicing costs which are much higher for mortgages than for bonds. Generally, bonds pay interest semiannually; mortgages, monthly. Mortgage yields, if computed as equivalent to a semi-annual interest investment, would be slightly higher than given in the table. Based on FHA-field-office opinions about average bid prices in the private secondary market for new-home mortgages for immediate delivery. Separate data available for 25-year and—beginning July 1961—30-year mortgages with minimum downpayments, weighted by probable volume of transactions. Yields computed by FHA, assuming prepayment period of 12 years for 25-year mortgages and 15 years for 30-year mortgages. Over the period for which they can be compared, the movement of the two'mortgage yield series has been similar . Dashed lines indicate periods of adjustment to changes in contractual interest rates. , Based on FHA-field-office opinion on typical interest rates (rounded) on conventional first mortgages prevailing in the market areas of insuring office cities. Beginning with April 1960, rate relates only to new-home mortgages; prior to that date, rate related to both new as well as existing-home mortgages. Dashed line indicates this change in the series. See note for Table 1. MORTGAGE AND BOND YIELDS Monthly 12 11 10 9 8 7 HOME MORTGAGES: 6 CONVENTIONAL 5 Aaa CORPORATE BONDS NEW ISSUES 4 I E L D S P R E A D ( F H A MORTGAGE VS. NEW ISSUE Aaa CORPORATE BONDS) 200 100 + 0 J 1962 1 L 1964 I 1966 _ 1 : 1968 L 11111111111111111111111 1970 100 TABLE 17: Conventional Mortgage Terms ' NEW HOMES DATE CON- FEES & TRACT CHARGES EFFEC- MATURITY RATE (PER (YEARS) TIVE (PER CENT) RATE CENT) 2 3 LOAN/ PRICE LOAN RATIO AMT. (PER ($000) CENT) 4 EXISTING HOMES CON- FEES & LOAN/ TRACT CHARGES EFFEC- MATU- PRICE (PER RATE TIVE RITY RATIO (PER CENT) RATE (YEARS) (PER 2 CENT) CENT) 3 LOAN AMT. ($000 4 1969 7.86 7.89 7.99 7.97 8.07 0.86 0.92 0.89 0.96 1.06 8.00 8.05 8.13 8.13 8.25 25.2 25.3 25.3 25.3 25.4 72.3 72.9 72.8 72.8 71.9 24.3 25.0 24.6 24.6 25.0 7.90 7.98 8.00 8.00 8.08 0.93 0.91 0.90 0.90 0.93 8.05 8.13 8.15 8.15 8.24 22.6 22.2 22.6 22.6 22.9 71.2 70.7 70.4 70.4 70.6 19.8 19.2 19.5 20.1 20.8 8.16 Jan. 8.23 Feb. Mar. 8.29 8.23 Apr. 8.28 May June . 8.31 July-' 8.32 Aug. 8.35 1.08 1.09 1.11 1.02 0.98 0.99 1.01 0.99 8.34 8.41 8.47 8.40 8.45 8.48 8.49 8.51 25.0 24.2 25.0 24.8 25.3 25.1 25.1 24.9 69.3 71.8 71.1 71.1 71.7 71.3 71.5 71.8 25.1 24.9 25.1 24.5 25.3 25.6 24.9 25.5 8.13 8.23 8.26 8.20 8.18 8.19 8.21 8.25 0.94 1.02 0.98 0.90 0.94 0.98 0.95 0.89 8.29 8.41 8.43 8.35 8.34 8.36 8.37 8.40 22.4 22.4 : 22.6 22.8 22.8 23;0 23.1 23.1 70.3 70.2 70.4 70.4 70.3 71.5 71.5 71.7 20.5 20.4 20.6 20.4 21.1 21.5 21.7 21.4 Aug. Sept. Oct. Nov. Dec. 1970 Compiled by Federal Home Loan Bank Board in cooperation with Federal Deposit Insurance Corporation. Data are weighted averages based on probability sample survey of characteristics of conventional first mortgages originated by major institutional lender groups (including mortgage companies) for purchase of single family homes. Data exclude loans for refinancing, reconditioning or modernization; construction loans to home-builders; and permanent loans which are coupled with construction loans to ownerbuilders. Related series on conventional mortgage rates only, based on unweighted opinions of field-office directors of the Federal Housing Administration, are available somewhat sooner than the results of the FHLBB-FDIC survey, and are included-in the case of new home mortgage rates—in Table 16. Fees and charges—expressed as ^percentage of the principal mortgage amount--include loan commissions, fees, discounts, and other charges which provide added income to the lender and are paid by the borrower. They exclude any closing costs related solely to transfer of property ownership. Includes fees & charges amortized over a 10 year period in addition to the contract interest rate. Derived by FRB. CONVENTIONAL MORTGAGE TERMS Years Monthly 30 MATURITY NEW 25 EXISTING 20 i i i I i i i i i i i i I i i i i i i i i i i i I 15 80 LOAN/PRICE RATIO NEW 75 EXISTING 70 1 i i i i i i i i i i i 1 i i i i i i i i i i i I 65 Thousands of dollars LOAN AMOUNT 30 20 EXISTING 10 I i i i i 1964 1966 1968 i i i i i i i i i i i 1970 * CHANGE IN SERIES