Midday Commentary: Fannie Mae, Freddie Mac stay in focus, gain ground; market starts strong

By Stephanie N. Rotondo

Phoenix, March 17 - As the new week began, preferred stock investors were continuing the previous week's trend - that is, zeroing in on Fannie Mae and Freddie Mac.

A trader noted that the agencies' preferreds were again higher, taking a cue from Friday.

The securities were up at least 1.5% to 2.5% in early trading.

A bipartisan group of senators has recently proposed legislation that would wind the two GSEs down over the course of the next five years. Once liquidated, a government bond insurance program would be implemented but would only kick in once private investors took sizable losses.

As for primary dealings, a trader said the pipeline had grown quiet.

Overall, the market was performing well, as the Wells Fargo Hybrid and Preferred Securities index rose 17 basis points as of mid-morning.

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