Junk bonds fall post-earnings; Carvana scrapes bottom; Carnival mixed; funds out $652 million

By Paul A. Harris and Abigail W. Adams

Portland, Me., July 14 – The secondary space had a heavy day on Thursday with the cash bond market falling ½ point as earnings season picks up steam – with the initial results disappointing.

JPMorgan Chase and Morgan Stanley became the latest to fall short of expectations with their earnings, reigniting fears stoked by Wednesday’s Consumer Price Index report with an inflation reading that blew past expectations.

Large, liquid issues continued to dominate the tape with CCC credits again feeling the brunt of the selling pressure.

Carvana Co.’s 10¼% senior notes due 2030 (Caa2/CCC) set a new all-time low on Thursday with the notes down more than 4 points on the week.

Carnival Corp.’s senior notes have remained level for much of the week. However, the cruise line operator’s capital structure was mixed on Thursday with its unsecured notes (B2/B) hitting fresh lows while its secured paper improved.

Meanwhile, outflows resumed after high-yield mutual and exchange-traded funds saw their first inflow since early June the previous week.

Funds lost $652 million in the week through Wednesday’s close, according to the Refinitiv Lipper Fund Flows report.

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