Fannie, Freddie improve; JPMorgan results better than expected; BofA, Wells Fargo on tap

By Stephanie N. Rotondo

Seattle, April 13 – A preferred stock trader said Fannie Mae and Freddie Mac paper was “moving more” as the GSE-linked preferreds dominated midweek trading.

On Tuesday, the preferreds got a pop as the market digested a slew of new unsealed documents related to a court case stemming from the government’s 2012 decision to commandeer a majority of the GSEs’ profits. The gains continued into Wednesday, and the mortgage giants were dominating overall trading.

Fannie’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) closed up almost 4 cents to $4.288. The preferreds were initially up 18 cents, or 4.24%, at $4.43 at mid-morning.

Freddie’s 8.375% fixed-to-floating rate noncumulative perpetual preferreds (OTCBB: FMCKJ) meantime ended 7 cents, or 1.67%, higher at $4.26. The preferreds had ticked up 16 cents, or 3.82%, to $4.35 in earlier trading.

Away from the GSEs, JPMorgan Chase & Co. kicked off bank earnings season on Wednesday with results that mostly beat expectations.

While the preferreds were reacting positively to the quarterly report, they were doing so on limited volume.

Preferred stock market players will likely keep an eye on bank earnings on Thursday as Bank of America Corp. and Wells Fargo & Co. are on tap to release their respective results.

Ahead of the numbers, Bank of America’s 6.2% series CC noncumulative preferreds (NYSE: BACPC) were up a penny at $26.36.

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