Morning Commentary: Preferred stocks weaken amid Russian ruble crisis; liquidity constrained

By Stephanie N. Rotondo

Phoenix, Dec. 16 – Liquidity in the preferred stock market remained weak Tuesday as the space drifted lower.

“Looks like most of my screen is red,” one trader said, though he added it was “nothing major.”

The Wells Fargo Hybrid and Preferred Securities index was down 8 basis points at mid-morning.

The broader markets were gyrating as the Russian ruble lost value against the dollar and the nation’s central bank raised rates by 650 bps to 17% in order to stem the decline.

The last time Russia took such measures was in 1998. At that time, the U.S. economy was strong, but that didn’t stop the stock market from plummeting on global economic fears.

There was also continuing concern about oil prices, which remained under pressure in early trading.

The Dow Jones industrial average and the S&P 500 were up a touch at mid-morning but had been much weaker at the open.

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