Morning Commentary: Preferred stock investors look to Fed announcement; Northern Trust steady

By Stephanie N. Rotondo

Phoenix, July 30 – The preferred stock market was muted in early trading as investors waited to see what the Federal Reserve had to say after its two-day meeting concludes Wednesday.

It is expected that the central bank will further reduce its bond repurchases and the market will also be looking for clues as to when short-term interest rates might rise.

Even on the heels of decent economic data, the preferred market was treading water.

The Wells Fargo Hybrid and Preferred Securities index was down 1 basis point as of mid-morning.

According to a new report, gross domestic product increased 4% in the second quarter, beating estimates of 3% growth. However, a July survey by ADP showed that the private sector added 218,000 jobs during the month, missing expectations of 230,000 new jobs.

“A lot of things went ex-dividend yesterday, but there wasn’t a lot of movement,” a trader noted.

Northern Trust Corp.’s new $400 million of 5.85% series C noncumulative perpetual preferreds were seen hanging around $24.90 in early trading.

The deal came Tuesday, upsized from $150 million.

A trader said the new issue “could free later today.”

Morgan Stanley & Co. LLC, BofA Merrill Lynch and Wells Fargo Securities LLC led the books.

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