Morning Commentary: Preferreds look to recoup losses; Northern Trust’s recent deal remains weak

By Stephanie N. Rotondo

Phoenix, Aug. 1 – Preferred stocks were “flat to slightly up” on Friday, according to a trader, even as a new jobs number disappointed the market.

The Wells Fargo Hybrid and Preferred Securities index was up 5 basis points at mid-morning.

The Labor Department said Friday that 209,000 jobs were added in July, down from the 230,000 expected. However, the report was the sixth straight month that over 200,000 jobs were added to the marketplace.

Unemployment increased to 6.2%, versus expectations it would hold steady at 6.1%.

As for the primary preferred market, Northern Trust Corp.’s new $400 million of 5.85% series C noncumulative perpetual preferreds were softer in early trading.

A trader saw the issue quoted wide at $24.40 bid, $24.74 offered. The issue actually traded at $24.40, down 23 cents from Thursday’s close.

The deal priced on Tuesday.

Meanwhile, Starwood Waypoint Residential Trust registered $100 million of series A cumulative redeemable preferreds late Thursday.

But a trader said he had yet to see any details on the offering, adding that he did not expect it to officially launch until Monday.

Public Storage could also soon be adding to the pipeline, the trader speculated, as the company just put out “good earnings.

“It wouldn’t surprise me,” he said. “They’re pretty consistent with bringing deals after earnings.”

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