Morning Commentary; China’s equity reprieve, Greece’s new deal buoy preferreds going into weekend

By Stephanie N. Rotondo

Phoenix, July 10 – There were strong tailwinds pushing the preferred stock market into higher territory on Friday.

The driving factors of the day continued to be Greece and China. For its part, Greece unveiled a new debt proposal late Thursday. The reforms were expected to be evaluated as early as Friday by E.U. creditors, and the country’s government even has a vote planned for later in the day.

As for China, its stock market continued to improve, spurred in part by new supportive measures enacted this week and in part by hopes Greece can get its act together.

In the preferred space, that meant a 10-basis point gain in the Wells Fargo Hybrid and Preferred Securities index at mid-morning.

While the Greek and Chinese factors have brought a bit of a relief rally, some market participants were turning their focus to Federal Reserve chairman Janet Yellen, who was scheduled to give a speech in Cleveland at midday.

The market will be going over the speech carefully, looking for any indications she might give as the central bank’s thoughts on the current crisis around the world and how that might impact an interest rate increase in the United States later this year. The Fed has been maintaining that any increase would be “data dependent,” so now the market is curious as to what data matters and what does not.

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