Morning Commentary: Preferred stocks mixed as jobs report beats; Ally, Entergy Arkansas active

By Stephanie N. Rotondo

Seattle, May 5 – Friday’s trading session was starting off mixed for the preferred stock market, even as a new U.S. jobs number topped expectations.

The Wells Fargo Hybrid and Preferred Securities index was up 2 basis points at mid-morning. The U.S. iShares Preferred Stock ETF was down 10 bps.

In April, 211,000 jobs were added, according to the latest Labor Department report. That resulted in the unemployment rate dipping to a 10-year low at 4.4%.

Wages meantime gained 0.3%, as was expected.

Still, the preferred market continued to see limited liquidity.

One trader noted that Fannie Mae “had strong earnings, so they’re jumping around a little bit.” The GSE posted a quarterly profit of $2.8 billion, which compared to the $2.2 billion profit peer Freddie Mac reported earlier in the week.

But as of mid-morning, the normally active issues weren’t all that busy.

What was busy was Ally Financial Inc.’s 8.125% series 2 fixed-to-floating rate trust preferred securities (NYSE: ALLYPrA) and Entergy Arkansas Inc.’s 4.875% $25-par first mortgage bonds due 2066 (NYSE: EAI).

The Ally paper was a penny lower in early trading, at $25.55. The Entergy notes were up a nickel at $23.22.

Looking ahead, a trader said that “we could get a couple deals next week,” though he had not heard any specifics as to who the issuers might be.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.