Morning Commentary: Preferred market rises despite subdued volume; oil and gas sector sees gains

By Stephanie N. Rotondo

Phoenix, Jan. 2 – Preferred stocks were edging up in the first trading session of 2015, though liquidity was muted.

“Everything is ticking up slightly,” a trader said.

The Wells Fargo Hybrid and Preferred Securities index was up 16 basis points at mid-morning.

He added that there was “no real reason” for the strength, though he also noted that “the long bond is going through the roof, probably because the euro is getting beat up” and that U.S. manufacturing “expanded less than forecast.”

The latter, he said, was an implication that the economy might not be as strong as some people believe. Therefore, he speculated that the Federal Reserve will likely “keep rates at these low levels for awhile,” probably though the year.

The oil and gas space was firming up with the market, even as oil prices hit new lows.

As of mid-morning, West Texas Intermediate crude was trading with a $52 handle and Brent was in a $56 context.

Vanguard Natural Resources LLC’s 7.625% series B cumulative redeemable preferred units (Nasdaq: VNRBP) were up 19 cents in early trading, at $19.60. Goodrich Petroleum Corp.’s 9.75% series D cumulative preferreds (NYSE: GDPPD) were 17 cents, or 2.18%, higher at $8.10.

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