Midday Commentary: Preferred market struggles to get back in the game after the long holiday weekend

By Stephanie N. Rotondo

Phoenix, Sept. 4 - The preferred stock market's first trading day of September was slow-going as players attempted to get back in the swing of things after a long weekend.

In some cases, players were just returning from weeklong end-of-summer vacations.

"It's very quiet," a trader said. "The secondary is barely doing anything. Volume is low. I haven't heard any word on new issues this week or next.

"It's the slowest day yet, worse than Friday."

The trader opined that there was a lack of any catalyst - "anything to act on" - to get the market moving one way or another. Europe and even the state of the United States remain "in flux," he said, giving little reason to jump in and take action.

However, he also noted that a break in the new issue supply "still might help us soak up some liquidity."

In recently priced deals, JPMorgan Chase & Co.'s 5.5% series O noncumulative preferreds were seen trading above par again. A trader said the preferred shares were offered at $25.05.

The deal has yet to list on the New York Stock Exchange, which is puzzling in an environment where securities have been listing rapidly post-pricing. The trader said he expects the issue to list by the end of the week, though he had not heard if that would in fact be the case or not.

Deutsche Bank AG's 6.55% trust preferreds (NYSE: DXB) were easily the day's biggest trader as of mid-afternoon. There was no news to spark the movement, but the paper was up 4 cents at $25.11 at midday, and more than 2 million trust preferreds had changed hands.

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