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Preferreds still edging lower, but signs of improvement seen; Fannie, Freddie gain ground
By Stephanie N. Rotondo
Seattle, Nov. 11 – A preferred stock trader said there was “a good flurry” in Friday trading, as the market looks to “sift through the ashes and see what looks good to keep.”
The Wells Fargo Hybrid and Preferred Securities index declined 25 basis points for the session. The index was off 22 bps at mid-morning. It fell 168 bps on Thursday and about half that amount on Wednesday in the wake of the U.S. election results.
A trader said the market was “bouncing around” as investors try to figure out how to position themselves ahead of a Trump presidency.
Fannie Mae and Freddie Mac were continuing their upward move. The agencies’ preferreds have been a major outlier in the market the last two days, on hopes that the president-elect would allow the GSEs to recapitalize, thereby reducing taxpayer risk.
Fannie’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) were up 60 cents, or 12%, at mid-morning, trading at $5.60. They closed at $5.65, a gain of 65 cents, or 13%.
Freddie’s 8.375% fixed-to-floating rate noncumulative preferreds (OTCBB: FMCKJ) were up 40 cents, or 8.16%, at $5.30 in early trading. At the bell, the issue was up 45 cents, or 9.18%, at $5.35.
Bank preferreds were meantime mixed.
JPMorgan Chase & Co.’s 6.15% series BB noncumulative preferreds (NYSE: JPMPH) were up 2 cents at mid-morning, at $25.41, though they closed just a penny higher at $25.40.
However, the 6.125% series Y noncumulative preferreds (NYSE: JPMPF) dipped 7 cents to $25.35.
In Bank of America Corp. paper, the 6.2% series CC noncumulative preferreds (NYSE: BACPC) added 19 cents to $25.25.
Goldman Sachs & Co.’s 5.95% series I noncumulative preferreds (NYSE: GSPI) finished a penny better at $25.14, as Wells Fargo & Co.’s 6% series V class A noncumulative preferreds (NYSE: WFCPV) declined 12 cents to $25.05.
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