Morning Commentary: Rate hike, Greece continue to weigh on preferred stock prices, liquidity

By Stephanie N. Rotondo

Phoenix, June 9 – A preferred stock trader said there was “selling pressure” in the market early Tuesday.

As such, the Wells Fargo Hybrid and Preferred Securities index was off 27 basis points at mid-morning.

The declines came despite a U.S. wholesale inventories report that showed gains, due in part to stabilizing oil prices.

But investors weren’t as much focused on data as they were on a looming interest rate hike and the ongoing Greek saga.

A trader noted that Greek officials are seeking to extend the country’s current bailout terms until March 2016. If that isn’t approved, the nation has three weeks to work out some other deal with European leaders.

Should the country fail to get a deal done, that could mean a hefty increase in volatility, the trader said.

Ahead of that, however, investors are “taking cash out and setting it aside,” he said.

Meanwhile, a job turnover report is expected to come out Thursday – the last such report the Federal Reserve will see ahead of its next meeting, at which point many expect the central bank to move forward with a rate increase in September.

As for the primary market, a trader said he was hearing that a deal was in the works for Thursday. But he said he would be “surprised” if the deal actually comes this week, what with Treasuries getting knocked around.

© 2015 Prospect News.
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