Monday Morning Reads
- Center of Hedge Fund Blowup
- Huge Block Trades
- Bond Investor Revolt
- The Start-Up Enemies of Wall Street
- What is Going on with China
- Fake Meat Startup
- The Swift Collapse of a Company Built on Debt
- Catching the Second or Third Train
- Owning the Best Stocks is Hard
From the weekend
- President Biden to announce infrastructure plan on Wednesday Bloomberg
- Progress made on freeing Ever Given from Suez Canal Reuters
- Tariffs on imports from China to remain in place WSJ
- Stellantis (STLA) to close five American plans due to semiconductor shortage CNBC
- Coronavirus restrictions loosened in England Reuters
- China and Iran sign 25-year economic cooperation agreement (FXI) NYT
- Credit Suisse (CS) and Nomura (NMR) facing a losing quarter after a client sold $20 bln of assets FT
- German labor union threatens strike in wage negotiations with Amazon (AMZN) Reuters
- Tesla (TSLA) CEO Musk discusses LFP batteries WSJ
- News Corp (NWS) looking to acquire consumer publishing company WSJ
- Positive view of H&R Block (HRB) Barron's
- Positive view of Welbilt (WBT) Barron's
- Positive view of high-yielding stocks like T, KO, ED, IBM, JNJ, K, PG, SLG, USB, and VZ Barron's
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.
Hedge fund manager Bill Hwang formerly ran Tiger Asia Management, a spinoff from hedge fund legend Julian Robertson's Tiger Management. (106 comments)
The drop in bank stocks is weighing on stock index futures, which point to a lower open on Wall Street.
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)
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)
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.
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.
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