Stocks fall as Archegos’ margin call ricochets the markets; Suez ship released

Wall Street opened lower on Monday, giving back some of last week’s gains, as the sudden unwinding of a hedge fund ricocheted through the markets.

On Friday, the S&P 500, Dow and Nasdaq closed more than 1% higher, with the larger market posting its best in three weeks. However, traders were watching several large stocks like Viacom (VIA) and Discovery (DISC), after a volatile session on Friday that saw several names suffer a blow related to the liquidation by Bill Hwang, a fund manager and former head of the family. by Tiger Management. Office.

Bloomberg News reported that Hwang’s firm, Archegos Capital Management, was forced by its banks to sell more than $ 20 billion in shares after some positions were moved against him. Similarly, Swiss banking giant Credit Suisse (CS) has warned that volatility resulting from the liquidation of the company would force the bank to deal a “very significant” blow to its first quarter results.

The week will be rather quiet until Friday, when the March jobs report will be released. The data should show that the economy has created a whopping 630.00 jobs – the most since October 2019 and the best with the start of the COVID-19 pandemic.

Markets were largely calm amid news that the massive ship stranded in the Suez Canal had finally been dislodged after nearly a week, which should pave the way for an end to the blockage that created a traffic jam in one of the world’s most important shipping lanes. The efforts have put upward pressure on oil and natural gas prices, as the canal is a busy artery for energy exports.

The past few weeks have been marked by choppy equity trading, particularly as some of the last few sessions of the first quarter approach. But overall, cyclical energy, financials, and industrials – or the biggest underperformers of 2020 – have outperformed sharply since the start of the year, while leading tech companies of last year are behind schedule. Signs of improving economic growth have crept in, with new unemployment rates falling more than expected on Thursday according to the latest positive reports.

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However, a dominant concern for many investors has actually been centered on the pace of economic expansion and whether the post-pandemic recovery, facilitated by the stimulus measures, could advance even more vigorously than expected and cause rapid inflation. In the wake of the passage of a $ 2 trillion stimulus package, the Biden administration is bracing for even more spending – and the likelihood of a tax hike.

“You can be sure that the expenses have a sub-zero multiplier and that tax increases are always an economic drag with the difference measure alone,” noted Peter Boockvar, chief investment officer at Bleakley Advisory Group.

Yet Federal Reserve policymakers have recently attempted to allay the fears of market participants in the face of a sharp rise in inflation. In NPR’s morning edition on Thursday, Fed Chairman Jerome Powell reaffirmed that the Fed remains firmly committed to targeting average inflation of 2% over time, and said any possible decline in US support. Fed would be done “gradually, over time and with great transparency.”

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10:15 a.m.ET: Suez Canal traffic resumes, Reuters Reports

According to Reuters, the dislodgement of the Ever Given – the ill-fated vessel that ran aground in the Suez Canal for nearly a week – allowed the resulting traffic jam to dissipate, the authority said on Monday. of the channel in a press release:

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9:30 a.m. ET: Stocks open lower as margin call bites

• S&P 500 (^ GSPC): 3,969.73, -4.81 (-0.12%)

• Dow (^ DJI): 33,058.66, -14.22 (-0.04%)

• Nasdaq (^ IXIC): 13,137.48, -1.24 (-0.01%)

• Gross (CL = F): $ 60.47 per barrel, – $ 0.50 (-0.82%)

• Gold (GC = F): $ 1,722.40 per barrel,-$ 9.90 (-0.57%)

• 10-year cash flow (^ TNX): flat, yield 1.658%

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8 a.m. ET: Stocks dip ahead of calm week, jobs data

Here’s where the markets were trading ahead of the opening bell Monday morning:

• S&P 500 Futures (ES = F): 3,950.25, -14.50 (-0.37%)

• Dow Futures (YM = F): 32,812.00, -142.00 (-0.43%)

• Future Nasdaq (NQ = F): 12,954.50, -12.25 (-0.09%)

• Gross (CL = F): $ 61.40 per barrel, + $ 0.43 (+ 0.71%)

• Gold (GC = F): $ 1,724.70 per ounce,-$ 7.60, (-0.44%)

10-year cash flow (^ TNX): flat giving 1.6600