Morning Commentary: Preferreds gain as jobs number improves; Fannie, Freddie recouping losses

By Stephanie N. Rotondo

Honolulu, Oct. 3 – Preferred stocks were “pretty quiet” early 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 Wells Fargo Hybrid and Preferred Securities index was up 12 basis points early in the session.

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.

In early Friday trading, the shares looked to be recovering some. 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.

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.

© 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.