Election Day weighs on preferred stock trading; Citigroup active, weaker with market

By Stephanie N. Rotondo

Seattle, Nov. 8 – Preferred stock market trading activity dwindled significantly on Tuesday as U.S. voters went to the polls for the general election.

“Volume was pretty darn light,” a market source commented.

“There is nothing going on until after the election,” a trader said. In fact, the market could take the entire week to digest the results, he said.

“Unless Trump gets in,” he noted. “That could shake things up a bit.”

Consensus is that if Donald J. Trump, the Republican candidate, wins the U.S. presidency, there will be a flight to quality, the trader remarked.

“But it’s probably going to be a non-event though,” the trader added, pointing to the fact that most polls show Hillary Clinton, the Democratic candidate, winning.

“It depends on what happens tonight and tomorrow,” said another source. At this point, a Trump victory would be akin to the United Kingdom’s Brexit vote earlier in the year.

“It would be a surprise,” the source said.

The Wells Fargo Hybrid and Preferred Securities index finished down 19 basis points. The index was down 7 bps at mid-morning.

As for the day’s dealings, Citigroup Inc. was moderately active – in fact, the most active name in the preferred stock space.

The 6.875% series H fixed-to-floating rate noncumulative preferreds (NYSE: CPK) waned 24 cents, closing at $27.24. The 7.125% series J fixed-to-floating rate noncumulative preferreds (NYSE: CPJ) fell a dime to $27.89.

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