Greece, China, FOMC overshadow preferred market; NYSE trading halt weighs on liquidity

By Stephanie N. Rotondo

Phoenix, July 8 – After gaining in the previous session on hopes Greece would soon have a debt deal in hand, the preferred stock market was coming back in on Wednesday.

The broader markets were also trending toward the red, as Greece continued to rail against the European Union’s austerity ideas, though Greek officials did relent and say that a more detailed proposal was going to be made by the end of the week.

Furthermore, late in the day it was reported that Greece intended to keep its banks closed until Monday.

But that wasn’t the only news investors were considering. China’s stock market remained under pressure, despite attempts by the government to shore up any major losses. And the Federal Open Market Committee released its June minutes, which showed that while Fed officials were seeing bright spots in the U.S. economy, concerns about Greece and China were not being pushed aside.

“Take your pick,” a market source said of the many reasons the market could be sluggish.

As if to make matters worse, the New York Stock Exchange was hit with a technical glitch that halted trading on that platform for over three hours.

Still, the inability to trade on the exchange for a few hours did not have a huge impact on preferred stock trading, according to a source.

“It was already down a lot anyway,” he said. “It was maybe more of an issue in liquidity than price movement.”

He added that while the market did finish weaker, the loss of those few trading hours might have stemmed the losses.

The Wells Fargo Hybrid and Preferred Securities index closed off 18 basis points.

“Things were largely a sea of red,” a source said.

Meanwhile, a trader noted that Gabelli Funds LLC said Monday that it had launched the Gabelli Go Anywhere Trust, a fund that would primarily invest in common and preferred stocks. The trader noted that the trust would likely be doing a preferred deal to get going, but there has been no word on such an offering.

Barclays ousts CEO

Barclays plc’s preferreds softened Wednesday after it was reported that the company’s chief executive officer, Anthony Jenkins, had been ousted.

The 7.1% series 3 noncumulative callable dollar preference shares (NYSE: BCSPA) fell 8 cents to $25.94. The 7.75% series 4 noncumulative callable dollar preference shares (NYSE: BCSPC) slipped a penny to $25.89.

The chairman of the bank’s board, John McFarlane, was the one who touted the unanimous decision, stating that the firm needed to scale down from its current “cumbersome and bureaucratic” state. Despite Jenkins attempts to reboot the company, it was felt that he was not moving fast enough.

McFarlane will take over as executive chairman while the company searches for a replacement.

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