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Preferred stock market soft despite signs of economic growth; MetLife shares stay in focus
By Stephanie N. Rotondo
Phoenix, June 3 – Though fresh economic data came in “right on target,” according to a trader, the preferred stock market was weak on Wednesday.
“The long bond is getting crushed,” the trader noted, as the market waits to see if E.U. leaders could get a deal done for Greece. The trader remarked that the parties are “too far in” to back away now.
“The Treasury market was off a lot,” another market source said. “That created a lot of red in the preferred market.”
As for the new data, ADP said that 201,000 payrolls were added in May, pointing to strength in the economy. Later in the day, the Federal Reserve released its Beige Book, which showed some signs of economic growth among the 12 Fed districts.
But even with the positive data, the Wells Fargo Hybrid and Preferred Securities index ended down 11 basis points.
“It could have been a worse day,” a source said. “But it wasn’t a great day.”
The red trend of the day was clearly seen among the day’s most actively traded issues, as only one preferred – MetLife Inc.’s 6.5% series B noncumulative preferreds (NYSE: METPB) – ended positive.
The paper ticked up a penny to $25.04.
The preferreds have been active since the company announced a tender and a call of the issue on Monday.
As for the rest of the active issues, Ally Financial Inc.’s 8.125% series 2 fixed-to-floating rate trust preferreds (NYSE: ALLYPA) fell 2 cents to $26.01, while Wells Fargo & Co.’s 5.85% series Q fixed-to-floating rate noncumulative perpetual preferreds (NYSE: WFCPQ) dropped 13 cents to $25.67.
In JPMorgan Chase & Co. paper, the 6.125% series Y noncumulative preferreds (NYSE: JPMPF) declined 9 cents to $25.06. However, its new $1.3 billion issue of 6.1% series AA noncumulative preferreds ended higher at $24.78, according to a source.
And rounding out the actives list, Bank of America Corp.’s 6.5% series Y noncumulative preferreds (NYSE: BACPY) closed 18 cents weaker at $25.72.
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