What happened

Shares of Bed Bath & Beyond (BBBY) were bouncing 3.3% higher Tuesday morning at 11:11 a.m. ET as the broader market celebrated the possibility of an easing of tensions between the U.S. and China. President Biden met with President Xi Jinping yesterday, which could mark the start of a deescalation of rancor between the two countries, though nothing substantive actually took place.

At the same time, there was some optimism the Federal Reserve might not be implementing more aggressive interest rate hikes.

Two people looking at kitchen goods.

Image source: Getty Images.

So what

Those are all high-level issues that don't have a direct impact on Bed Bath & Beyond but still tangentially affect the retail stock's business. Bellicose words and trade wars between the world's two largest economies benefit no one, while hope for a soft landing for the economy would minimize the wreckage a recession would otherwise cause.

Bed Bath & Beyond can't afford for consumers to go into more of a tailspin than they're already in. Even though consumer spending was up 0.6% in September (the latest data available) and personal income was up 0.4%, inflation continues to ravage whatever small gains are being made. Consumers continue to spend more on food and gas, leaving little left for other items, including household goods.

Now what

Investors should still be worried about Bed Bath & Beyond. Just yesterday, it announced it entered into another debt exchange, which in theory ought to help lower its interest expense and ameliorate some of the debt burden it carries.

At the end of August, it had $1.7 billion in long-term debt and another $1.5 billion in operating lease liabilities, while having just $135 million in cash.