Morning Commentary: Secondary quiet as markets digest Fed speech; DexCom trades lower

By Abigail W. Adams

Portland, Me., Aug. 25 – It was a sleepy morning in the convertibles secondary space with trading volume at a crawl as markets digested Federal Reserve chair Jerome Powell’s highly anticipated comments from Jackson Hole.

Treasuries were largely flat and equities optimistic at the outset of Friday’s session.

However, selling set in with Powell’s comments doing little to shed light on the ambiguity surrounding the Fed’s next rate moves.

The Dow Jones industrial average was down 63 points, or 0.18%, the S&P 500 index was down 0.41%, the Nasdaq Composite index was down 0.56% and the Russell 2000 index was down 0.48% shortly before 11 a.m. ET.

There was $37 million in reported volume about one hour into the session with no name seeing concentrated trading activity.

DexCom Inc.’s 0.375% convertible notes due 2028 were the most actively traded issue in the secondary space.

The notes gained in early trade after hitting an all-time low of 90.75 the previous session.

However, they resumed their downtrend and set a new all-time low early Friday.

The 0.375% notes were seen changing hands at 91.125 versus a stock price of $101.19, according to a market source.

However, they returned to a 90-handle and were seen trading at 90.5 a short time later.

There was $5 million in reported volume.

DexCom’s stock was trading at $99.69, a decrease of 1.28%, shortly before 11 a.m. ET.

DexCom priced a $1.25 billion issue of the 0.375% convertible notes in early May.

The notes initially put in a strong performance in the aftermarket.

However, they have been on a downtrend since the company reported earnings in late July.

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