Morning Commentary: Wayfair convertible notes in focus early on quiet morning

By Abigail W. Adams

Portland, Me., April 13 – It was another quiet morning in the convertibles secondary space on Wednesday with equity markets launching the day in the green after a volatile session on Tuesday.

The Dow Jones industrial average was up 138 points, or 0.40%, the S&P 500 index was up 0.52%, the Nasdaq Composite index was up 1.25% and the Russell 2000 index was up 1.05% shortly before 11 a.m. ET.

While equity markets were in the green, the market still felt weak as earnings season commences.

The early session rally in equities on Tuesday was used as an opportunity to sell, and Wednesday’s early session strength felt similar, a source said.

With no new paper entering the space and a cloud of uncertainty over the market, trading activity in the secondary space remained muted.

There was $62 million in reported volume about one hour into the session.

Wayfair Inc.’s 1% convertible notes due 2026 were active early in the session.

The notes were changing hands at 102.625 versus a stock price of $106.93 early in the session.

There was $7 million in reported volume.

Wayfair’s stock wavered between positive and negative territory early in the session. It was changing hands at $108.14 shortly before 11 a.m. ET.

The home decor e-commerce company is scheduled to report earnings on May 6.

The estimates are for a loss per share.

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