Preferred stock investors eye data; Freddie sees quarterly loss; banks on credit review

By Stephanie N. Rotondo

Seattle, Nov. 3 – The preferred stock market was flat at Tuesday’s bell, though one market source said liquidity was “decent.”

To start out the session, another trader said the session was “sleepy” as investors were keeping their “eye on the prize.”

Later this week, the second trader said, a fresh initial jobless claims number is expected, as well as nonfarm payrolls. How those figures look will determine “whether the Fed will have a reason to raise rates in December,” the trader said.

As for the new issue pipeline, the space continued to be silent. The trader noted that with Veterans Day next Wednesday, issuers will “basically have one week to get a deal done and then it is Thanksgiving and November is over.”

“There is a lot of chatter that [Citigroup Inc.] will be issuing soon,” another source remarked.

In the secondary, Freddie Mac reported its first quarterly loss in four years on Tuesday, prompting some to call for federal housing reform sooner than later, according to a trader. The loss means the Treasury has no profits to sweep up either, he said.

Meanwhile, Standard & Poor’s said it is taking a look at eight major U.S. banks as possible candidates for downgrade, including Citigroup, JPMorgan Chase & Co. and Goldman Sachs Group Inc.

Despite that news, the banks’ preferreds were trending higher.

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