Midday Commentary: Preferreds slip ahead of FOMC announcement; Full Circle slated for Wednesday

By Stephanie N. Rotondo

Phoenix, June 18 - The preferred stock market was drifting in a bit on Tuesday, which a trader said could be attributed to profit-taking.

He also noted the housing numbers "were good," as new home construction starts rose 6.8% in May, though new construction permits dipped 3.1%.

He also remarked that the consumer price index was "off a little bit."

The data could suggest that the "economy might not be as strong" as some think, he said. As such, many investors were waiting to see what the Federal Reserve's Federal Open Market Committee would say on Wednesday.

But because of the general market volatility seen in the last few weeks, the primary preferred market has been slow.

"A lot of stuff was shelved," a trader said. For instance, he said there was a large bank deal that was originally planned for the beginning of last week, but it never came.

"I think everyone is waiting for the volatility to calm down," he said.

Full Circle Capital Corp.'s expected $25 million offering of $25-par senior notes is expected to launch on Wednesday, according to a trader with knowledge of the deal. He said the issue would have a seven-year term and be non-callable for three years.

"We're still waiting on price talk," he added.

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