Preferred Stock Yields Remain Stable Despite Weak Jobs Report

Last week's weak jobs report sent common stock prices higher as value investors took the dismal performance as a sign that the Fed's Quantitative Easing bond-buying program would continue unabated. But preferred stock investors did not react the same way to the news. In fact, preferred stock investors hardly reacted at all, supporting the idea that preferred stock investors have already "priced in" the Fed's exit of the QE program.

Even when Fed officials began dropping strong hints that a tapering of their QE program was coming in September, preferred stock prices remained relatively stable as the September 17-18 Fed meeting approached. Average preferred stock prices, and therefore yields, have remained largely unchanged since mid-August and that continued to be the case in the face of last week's jobs report...

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