Morning Commentary: Preferred stocks continue to strengthen; Navios Maritime improves on ruling

By Stephanie N. Rotondo

Seattle, Dec. 22 – Preferred stocks remained firm early Thursday, spurred by economic data that painted a rosy picture, a trader said.

Based on the latest jobs figures, among other things, the economy “appears to be in better shape than analysts thought,” the trader commented.

The Wells Fargo Hybrid and Preferred Securities index was up 13 basis points at mid-morning.

While the tone of the market continued to be positive, liquidity was once again limited.

“It’s going to be this way the rest of the year,” a trader lamented.

Navios Maritime Holdings Inc.’s preferreds were heading into higher territory after the company said that a London arbitration tribunal ruled that its 20-year contract with Vale International SA was in full effect.

The 8.625% series H cumulative redeemable perpetual preferreds (NYSE: NMPrH) were up $1.20, or 19.92%, at $7.26. The 8.75% series G cumulative redeemable perpetual preferreds (NYSE: NMPrG) increased 95 cents, or 14.91%, to $7.32.

Vale had previously challenged the contract, which pertains to an iron ore port currently under construction. The tribunal, however, sided with Navios.

Additionally, the tribunal said that if Vale fights the contract further, Navios can cancel the deal and receive damages in the process.

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