Bank earnings from Wells Fargo, Citi, JPMorgan beat; GSEs active; Ashford’s deal frees up

By Stephanie N. Rotondo

Seattle, Oct. 14 – The preferred stock market was looking to rebound early Friday as bank earnings came in better than expected.

The Wells Fargo Hybrid and Preferred Securities index was up 53 basis points at mid-morning.

Wells Fargo & Co., Citigroup Inc. and J.P. Morgan Chase & Co. kicked off bank earnings season on Friday. Each of the big banks reported third-quarter results that beat estimates – even Wells Fargo, which has been dealing with the fallout of a fraudulent account scandal since early September.

But despite the pleasing results, the banks’ preferreds were not moving much.

“They beat earnings, but they took a hit obviously” on the scandal, a trader said of Wells Fargo. He opined that investors were opting to sit it out for now, because “we don’t yet know how big and how bad this is going to be.”

Meanwhile, Fannie Mae and Freddie Mac preferreds were trading actively, but a market source said there was no “material news” on the GSEs to cause the volume.

The names finished the day in mixed fashion.

As for the primary market, Ashford Hospitality Trust Inc.’s $150 million of 7.375% series G cumulative preferreds – a deal priced Thursday – were already trading under a temporary symbol, according to a trader.

The symbol is “AHFH.”

A second source said the issue freed to trade at noon ET.

He saw the volume weighted average price at $24.69. Paper was pegged at $24.70 at mid-morning.

© 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.