Morning Commentary: Tesla remains in focus as stock rebounds; trading still constrained

By Stephanie N. Rotondo

Seattle, July 7 – Tesla Inc. continued to be the focus of the convertible bond market in early Friday trading.

However, a trader remarked that the activity in the name was “only because it [has] multiple issues with a trade or two apiece,” adding that overall liquidity was only around $60 million at mid-morning.

As for the Tesla convertibles, they were “just nuking,” the trader said.

Another market source pegged the 1.25% convertible notes due 2021 in a 105.5 to 106.5 context, about in line to slightly better than Thursday’s closing levels. The 0.25% convertible notes due 2019 were meantime around 106.75, which was deemed about ½ point better on an outright basis.

The company’s shares (Nasdaq: TSLA) were up nearly 2% in early dealings.

There was no fresh news on Tesla that would specifically help it rebound from its week of declines. In fact, the gains in the name came as the broader markets were on the rise, boosted by a better-than-expected jobs number.

In its latest monthly report, the Bureau of Labor Statistics said that 222,000 jobs were added in June. That beat market expectations of a 180,000-jobs increase.

However, the unemployment rate was slightly higher at 4.4% – versus 4.3% in May – and wage growth continued to be less than stellar at 2.5% for the year.

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