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Morning Commentary: Market activity muted as investors eye Fed meeting; recent deals stay on radar
By Stephanie N. Rotondo
Phoenix, Sept. 14 – Preferred stocks started trading off a touch early Monday following similar declines in the common stock market.
The Wells Fargo Hybrid and Preferred Securities index was down 1 basis point at mid-morning. By comparison, the Dow Jones industrial average was down about 31 bps, pressured in part by a decline in the energy sector as crude prices softened.
Looking to the week’s new issue calendar, a trader said he was “not hearing anything” planned for the week.
“I imagine they will try to clean [recent deals] up before they bring” anything new, the trader said.
He also noted that Rosh Hashana and the upcoming Federal Reserve meeting was keeping activity “quiet.”
The Fed will begin its meeting on Wednesday and could decide to raise interest rates. But with the recent volatility in the marketplace, there is speculation that the increase could be put on hold or that the hike will be less than previously expected.
Of the day’s dealings, last week’s new issues remained in focus.
Qwest Corp.’s $400 million of 6.625% $25-par senior notes due 2055 – a deal priced late Thursday – were seen as free to trade and were quoted at $24.55 bid, $24.60 offered.
AmTrust Financial Services Inc.’s $125 million of 7.5% $25-par subordinated notes due 2055 – a deal priced Wednesday – were meantime pegged at $24.50 bid, $24.55 offered.
And while the broader market was selling off a bit, Wells Fargo & Co.’s $900 million of 6% series V class A noncumulative preferreds were trading up to par, according to a trader.
That issue priced Tuesday.
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