Goldman, JPMorgan earnings beat expectations, preferreds mixed; Wells Fargo frees to trade

By Stephanie N. Rotondo

Phoenix, July 15 – Preferred stocks were soft Tuesday ahead of and following Federal Reserve chairman Janet Yellen’s testimony before Congress on Tuesday.

The Wells Fargo Hybrid and Preferred Securities index finished down 13 basis points. At mid-morning, it had been down 6 bps.

In her testimony before congressional leaders, Yellen said that the central bank intends to keep interest rates low at present time, citing continued unemployment concerns and low inflation.

Aside from Yellen’s remarks, the market was also keeping an eye on earnings from the Goldman Sachs Group Inc. and JPMorgan Chase & Co. Both banks had better-than-expected fixed-income revenues, which helped them report profits that beat estimates.

Still, both preferred structures were mixed overall, and in the case of JPMorgan, liquidity was lacking.

In the primary market, no deals of size were announced, though Independent Bank Group Inc. of McKinney, Texas, did launch a $60 million offering of $25-par subordinated notes due 2024.

Meanwhile, Wells Fargo & Co.’s new $700 million issue of 6% series T class A noncumulative perpetual preferreds – a deal that priced Monday – freed at mid-morning, according to a trader.

After the close, yet another market source quoted the new issue at $24.83 bid, $24.88 offered.

Wells Fargo Securities LLC led the deal.

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