Morning Commentary: Convertibles trading thin as equities tank; ON Semiconductor active

By Abigail W. Adams

Portland, Me., Aug. 5 – Trading activity in the convertibles secondary space was light early in Monday’s session as equity markets saw an ugly start to the week with China retaliating against U.S. president Donald Trump’s threatened tariffs.

The Dow Jones industrial average dropped 600 points, the Nasdaq composite was down 3% and the S&P 500 was down 2.35% shortly before 11 a.m. ET.

There was about $48 million in reported volume on the tape a little over one hour into Monday’s session with few names seeing concentrated trading activity.

The tech sector was among the hardest hit from the intensifying trade battle.

ON Semiconductor Corp.’s 1% convertible notes due 2020 were among the most actively traded issues early in Monday’s session with the notes trading down alongside stock.

In addition to exposure to the trade war, ON Semiconductor reported mixed earnings prior to the market open.

The 1% convertible notes dropped about 6 points outright to 115.25 early in the session, a market source said.

The bonds saw $6 million in reported volume.

ON Semiconductor stock traded down to $17.96, a decrease of 10.11%, shortly before 11 a.m. ET.

ON reported earnings per share of 42 cents for the second quarter, which were in line with analyst expectations.

However, revenue of $1.348 billion missed analyst expectations for revenue of $1.384 billion.

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