Morning Commentary: Preferred stocks look to rebound as week ends; jobs report, election in focus

By Stephanie N. Rotondo

Seattle, Nov. 4 – After being in decline all week, the preferred stock market was attempting to rally in early Friday trading.

The Wells Fargo Hybrid and Preferred Securities index was up 6 basis points at mid-morning.

The gains came as the Labor Department reported that non-farm payrolls increased by 161,000 in October. Though that was less than the 173,000-add that was expected, a trader noted that it “wasn’t a big miss.”

The report also showed the unemployment rate falling to 4.9% from 5% the month before.

Still, liquidity remained limited and a trader opined that the coming week would follow that trend, at least to start.

“Monday and Tuesday are going to be uneventful, except that we get a new president,” he said.

He noted that there is some concern that the election’s outcome could put pressure on the bond market, similar to the United Kingdom’s Brexit vote, “if there is a big upset.”

Among the week’s new issues, AXIS Capital Holdings Ltd.’s $550 million of 5.5% series E noncumulative preferreds – a deal priced Monday and trading under a temporary ticker, “AXHHF” – were recovering a bit, trading up to a $24.77 bid, $24.82 offered context, according to a trader.

Hersha Hospitality Trust’s $100 million of 6.5% series E cumulative redeemable preferreds – a deal priced Tuesday – were meantime pegged at $24.82 bid, $24.90 offered.

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