Morning Commentary: Stocks gain; convertibles primary silent; liquid issues edge lower

Chicago, Oct. 3 – Equity indexes were positive out of the gate on Monday morning, the first day of the fourth quarter. The S&P 500 index, the Russell 2000 index and the Nasdaq Composite index were all up at least 1.5%.

Popular, liquid convertible bonds were starting to make their morning moves.

The frequently traded Southwest Airlines Co. 1.25% convertibles due 2025 (Baa1/BBB) were starting their morning trading around 1 point lower than where they ended late Friday afternoon.

The bonds were trading in the 113 range Monday morning after ending Friday above 114, having shifted from 115 in the early going on Friday.

The airline’s stock moved up 0.81%, marked at $31.12 midmorning.

Royal Caribbean Group’s 6% convertible notes due 2025, often in play, were not heavily changing hands on Monday morning but were having trouble staging the same recovery bounce the company’s stock was undergoing by midmorning.

The cruise line’s stock suffered steep losses late last week after industry peer Carnival Corp. reported disappointing earnings.

On Monday morning, the stock was staging a modest recovery and moved up more than 2% to hit $38.90.

Royal Caribbean’s stock started a week ago Monday just above $44 per share before the precipitous dive later in the week.

Not much was on the board Monday morning for the 6% bonds, but what was there was lower, just below 104 whereas the bonds were still above 105 Friday evening.

The bonds were all over the place at the beginning of last week but were moving generally between 115 and 117 last Monday.

Sea Ltd. was making waves in the secondary bond space, ticking modestly lower in the first few hours of the week.

The bonds dipped below 69 in one trade midmorning but were hovering just above that 69 watermark line, generally.

Still, the bonds have been on a general, gentle downtrend over recent weeks, dropping 0.25 point here, 0.5 point there.

The Singapore tech conglomerate’s stock was 3.3% lower just before 11 a.m. ET.

In the last couple of months, the company has been cutting back on staff and even, at the beginning of September, rescinding some job offers for new hires.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.