Preferreds gain as jobs number improves; Fannie, Freddie in focus, recovering lost ground

By Stephanie N. Rotondo

Honolulu, Oct. 3 – Preferred stocks were “pretty quiet,” a trader said Friday, but trading higher as a new jobs number showed that unemployment had fallen to 5.9%, the first dip below 6% since 2008.

The new rate came as 248,000 non-farm jobs were added in September, according to a Labor Department report.

The Wells Fargo Hybrid and Preferred Securities index closed up 14 basis points.

Fannie Mae and Freddie Mac paper were rebounding as well, after suffering major losses in the last few sessions following news that a federal judge had slapped down investors’ lawsuits that alleged the government’s consignment of the agencies’ profits was illegal.

A trader said there was “still a lot of focus” on Fannie Mae and Freddie Mac paper on Friday.

In early Friday trading, the preferreds looked to be recovering some, as Fannie’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) moved up 40 cents, or 10.64%, to $4.16 and Freddie’s fixed-to-floating rate noncumulative perpetual preferreds (OTCBB: FMCKJ) put on 46 cents, or 12.07%, to trade at $4.27. The issues gave up some of those gains by day’s end, however, though they still ended the session higher.

The Fannie 8.25% preferreds closed up 14 cents, or 3.72%, to $3.90, while Freddie’s fixed-to-floating preferreds ended up 15 cents, or 3.94%, to $3.96.

“Freddie and Fannie preferreds stopped the decline,” a market source reported. “Most Fannie and Freddie issues were up 3% to 8%.”

Meanwhile, no new deals were announced as of Friday morning, and one trader remarked that he had not heard of deals planned for the coming week. However, he opined that the calendar could build up if the market firms up.

If Qwest Corp.’s $500 million issue of 6.875% $25-par senior notes due 2054 – priced Sept. 22 – moves up, “that could help,” he said, seeing the issue (NYSE: CTV) in a $24.50 to $24.55 context.

The notes ended the day at $24.59, up 14 cents.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.