Wall Street Breakfast: Archegos Implosion

Top News Archegos implosion Shutterstock Wall Street is on tenterhooks as the fallout from a hedge fund implosion that roiled the stock market Friday moves to its second trading day. Traders will be "glued to their screens," one portfolio manager told Bloomberg. Archegos Capital, the family office run by Bill Hwang that was pushed to liquidate, was forced to sell more than $20B of stocks on Friday after margin calls. Archegos, a biblical word that means "prince," led to a tumble in ViacomCBS (VIAC, VIACA), Discovery (NASDAQ:DISCA) and Chinese internet stocks after a margin call. Hedge fund manager Bill Hwang formerly ran Tiger Asia Management, a spinoff from hedge fund legend Julian Robertson's Tiger Management. (106 comments)       Read in Browser LISTEN TO TODAY'S PODCAST AVAILABLE AT 8AM ON:                Top News Archegos implosion Shutterstock Wall Street is on tenterhooks as the fallout from a hedge fund implosion that roiled the stock market Friday moves to its second trading day. Traders will be "glued to their screens," one portfolio manager told Bloomberg. Archegos Capital, the family office run by Bill Hwang that was pushed to liquidate, was forced to sell more than $20B of stocks on Friday after margin calls. Archegos, a biblical word that means "prince," led to a tumble in ViacomCBS (VIAC, VIACA), Discovery (NASDAQ:DISCA) and Chinese internet stocks after a margin call. Hedge fund manager Bill Hwang formerly ran Tiger Asia Management, a spinoff from hedge fund legend Julian Robertson's Tiger Management. (106 comments)       Financials weigh on futures The drop in bank stocks is weighing on stock index futures, which point to a lower open on Wall Street. S&P futures (SPX) (NYSEARCA:SPY) -0.6%, Nasdaq futures (NDX:IND) (NASDAQ:QQQ) -0.6% and Dow futures (INDU) (NYSEARCA:DIA) -0.6% are all lower. The SPDR S&P Financial Sector ETF (NYSEARCA:XLF) is down 1.4% in premarket trading. Goldman Sachs and Morgan Stanley moved quickly to exit positions on Friday, but others weren't so quick off the mark.

"It is unclear why Nomura sat on their hands and racked up these large losses," an executive at a Wall Street bank told the Financial Times. (7 comments)

     

 

Financials

Credit Suisse warns on profit

Credit Suisse (NYSE:CS) shares are down 10% in Swiss trading after the company said it was forced to exit positions after the Archegos Capital fire sale.

"While at this time it is premature to quantify the exact size of the loss resulting from this exit, it could be highly significant and material to our first quarter results, notwithstanding the positive trends announced in our trading statement earlier this month," Credit Suisse said.

It said that other banks are also exiting positions.

The Wall Street Journal is reporting $30B in stock sales and adds that Deutsche Bank (NYSE:DB) was also selling large blocks of stock. Goldman Sachs and Morgan Stanley have also been reported as offering block trades. (6 comments)

     

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Commodities Suez Canal progress The Ever Given, the ship that has been stranded in the Suez Canal for almost a week, has been partially refloated, according to shipping officials. Maritime services provider Inchcape Shipping Services said that the vessel had been refloated at about 4:30 a.m. local time in Egypt and was being secured. Ten tug boats participated in the refloating operation, the Suez Canal Authority said earlier. The breakthrough in the rescue attempt came after diggers removed 27,000 cubic meters of sand, going deep into the banks of the canal. The ship became stranded in the canal on March 23, after running aground while entering the Suez Canal from the Red Sea, bringing one of the world's busiest shipping lanes to a standstill and sparking fears of disruption to world trade. Oil prices retreated, with U.S. crude down 0.8%, around $60.50 a barrel.         Tech Facebook ad rates bounce back The rates Facebook (NASDAQ:FB) draws for its advertising took a hit in 2020, buffeted by headwinds ranging from an industry slump alongside the COVID-19 pandemic to the "Stop Hate For Profit" campaign, which led hundreds of advertisers to boycott the platform last summer. But those rates (measured in cost per thousand impressions, or CPM) have returned to pre-pandemic levels and are showing continued growth - back to business, as it were. The cost of Facebook advertising is up 30% compared to mid-March 2020, data from Aisle Rocket show. (32 comments)

What else is happening... Tencent Music Entertainment's (NYSE:TME) board has approved a share buyback program to repurchase up to $1B.Heavily shorted GSX Techedu (NYSE:GSX), which sank 42% on Friday, may be seen as a victory for shorts who have been critical of the Chinese online tutoring company over the past year.SPAC CM Life Sciences II (NASDAQ:CMIIU), the SPAC backed by activist Keith Meister's Corvex Management LP and life sciences investor Casdin Capital, is reportedly nearing a transaction to take protein analysis company SomaLogic public.News Corp. (NASDAQ:NWS) is reportedly near an agreement to buy the consumer arm of educational publisher Houghton Mifflin Harcourt (NASDAQ:HMHC) for an unspecified sum, which could be announced as soon as tomorrow.

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Today's Markets In Asia, Japan +0.7%. Hong Kong -0.1%. China +0.5%. India closed. In Europe, at midday, London -0.3%. Paris +0.2%. Frankfurt +0.2%. Futures at 6:20, Dow -0.6%. S&P -0.6%. Nasdaq -0.6%. Crude -0.8% to $60.50. Gold -0.4% at $1725.40. Bitcoin +1.7% to $57312. Ten-year Treasury Yield 4 bps to 1.664% Today's Economic Calendar 10:30 Dallas Fed Manufacturing Survey 11:00 Fed's Waller Speech Companies reporting earnings today »

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