Preferred stocks rebound as week ends; jobs report, election in focus; Fannie, Freddie up

By Stephanie N. Rotondo

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

The Wells Fargo Hybrid and Preferred Securities index finished up 26 basis points. The index was up 6 bps 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.

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.

The paper closed at $24.78, down 2 cents.

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. That was seen ending at $24.82, a gain of 7 cents on the day.

As to the day’s notable exception in terms of volume, Fannie Mae and Freddie Mac preferreds were quite active, and better. The GSEs reported earnings this week, both showing improved figures year over year.

However, one market source noted that the activity in the GSE-linked paper was possibly misleading, since much of the volume occurred in a two trades.

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