Morning Commentary: Preferred stocks see strong kick-off to 2017; Vanguard rises with oil prices

By Stephanie N. Rotondo

Seattle, Jan. 3 – The preferred stock market had a firm tone as 2017 began, though on “light volumes,” a trader said.

The trader attributed the limited liquidity to it being the first real day back from the holidays.

The trader also remarked that the market would likely be “keeping an eye on the next 17 days,” looking for direction from the incoming administration and “what Congress has in store.”

The Wells Fargo Hybrid and Preferred Securities Index was up 26 basis points at mid-morning.

There was also little in the way of preferred-specific news. But with bank earnings expected to start next week, things could pick up.

A trader said there would not be any new issues out of the banking sector ahead of earnings but added that “we may see a couple [business development companies].”

As for the day’s early dealings, Vanguard Natural Resources LLC’s 7.625% series B cumulative redeemable preferred units (Nasdaq: VNRBP) were up 25 cents, or 9.26%, at $2.95.

The upward move came as domestic crude prices improved over 2% on hopes a production cut agreement from OPEC and a few non-OPEC oil producers would serve to slash a global oversupply of the commodity.

The output cut went into effect on Jan. 1.

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