Morning Commentary: Preferreds rally with broader markets; Deutsche Bank firms on debt buyback

By Stephanie N. Rotondo

Seattle, Feb. 12 – The preferred stock market had a “nice little bounce” in early Friday trading, according to one sellside source.

“It’s not a huge snap back, but that’s to be expected going into a long weekend,” he said. “Nobody wants to put risk on.”

The Wells Fargo Hybrid and Preferred Securities index was up 81 basis points at mid-morning.

The broader markets were also rebounding, as retail sales data indicated that the economy is “relatively strong,” the trader said.

Still,” people don’t believe” that the economy or that banks are on an even keel, the trader said. It did help that Jamie Dimon, JPMorgan Chase & Co. chief executive officer, “put his money where his mouth is” and bought back $26.6 million of JPMorgan common stock.

Also helping to relieve investors’ concerns was news that Deutsche Bank AG planned to buy back over $5 billion in both euro- and dollar-denominated debt.

“So that’s good,” the trader said.

On the news, the German bank’s preferreds were ticking higher.

The 7.6% trust preferred securities (NYSE: DTK) were up 95 cents, or 4.33%, at $22.84. The 8.05% TruPs (NYSE: DKT) were 87 cents, or 3.85%, higher at $23.44.

Barclays Bank plc’s preferreds also “snapped back,” according to a trader.

The 8.125% series 5 noncumulative callable dollar preference shares (NYSE: BCSPD) gained 38 cents, or 1.58%, in early trading, moving up to $24.43.

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