By Joy Wiltermuth
Layoffs and losses in a tight labor market?
The slide comes a day after Carvana, an online automotive retailer known for its car vending machines, said it was laying off about 2,500 workers, or around 15% of its workforce, weeks after it reported a $506 million loss in the first quarter.
The layoffs come a week after Federal Reserve Chairman Jerome Powell pointed to a historically tight labor market, as the central bank looks to engineer a soft landing for the economy, by cooling inflation without sparking a recession.
After detailing its layoff plans, Carvana's debt was the most-actively traded in the U.S. "junk-bond" market on Wednesday, followed by that of Bausch Health Americas Inc. (BHC.T) and Coinbase, according to BondCliq data.
Trading was the heaviest in Carvana's CCC-rated 10.25% coupon debt due May 2030, with prices falling from about $99 a week ago to $84.94. Bond prices move in the opposite direction as yields.
Coinbase on Tuesday reported earnings, disclosing it swung to a loss and shed 2.2 million crypto traders as prices for bitcoin , ethereum and other cypto assets plunged from last year's highs.
Its longest BB+ rated 3.625% coupon bonds due October 2031 were fetching $66 prices Wednesday, down from $75.50 a week before.
Fixed-income investors have faced a brutal start to 2022 on the back of interest-rate volatility tied to efforts by the Federal Reserve to tamp down high inflation by raising rates and cutting its nearly $9 trillion balance sheet.
Yields in the ICE BofA US Corporate Index were last spotted at 7.4%, up from pandemic lows near 4%, which spurred a record debt boom.
Shares of Carvana were down about 87.1% on the year to date Wednesday, while those of Coinbase were down 78.7%, according to FactSet. Coinbase declined to comment. A request for comment to Carvana wasn't immediately returned.
(END) Dow Jones Newswires
May 11, 2022 19:04 ET (23:04 GMT)
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