Dow still closes in the plus: Archegos Capital causes uncertainty

Dow still closes in the black
Archegos Capital causes uncertainty

After a bumpy day of speculation about a default at the US hedge fund Archegos Capital, the mood on Wall Street is rising again. In contrast, the US vaccination campaign, which continues to be successful, is pulling the markets with it – the Dow still gains in the end.

At the start of the trading week before Easter, US investors held back on stocks. The US standard value index Dow Jones closed a moderate 0.3 percent higher to 33,171 points. The technology-heavy Nasdaq, however, lost 0.6 percent to 13,059 points. The broad S&P 500 lost 0.1 percent to 3971 points.

Bitcoin 57,536.75

Investors were worried about the troubled situation of the US hedge fund Archegos Capital. The problems of the hedge fund threaten the Swiss Credit Suisse and the Japanese investment bank Nomura with losses of billions. The news caused massive uncertainty among investors on the stock exchange. Credit Suisse shares plummeted 14 percent in Zurich, while Nomura shares plummeted 16 percent in Tokyo. The second-largest Swiss financial institution said that a major hedge fund had failed to make additional contributions – so-called margin calls. Since the investor did not inject any money, Credit Suisse and other banks are in the process of liquidating securities positions.

In the US, shares in Morgan Stanley fell about three percent after a report in the Financial Times about massive share sales. Bank of America, Citigroup, JPMorgan Chase, Goldman Sachs and Wells Fargo, which lost up to 3.3 percent, also came under pressure. Investors feared that more share sales were imminent. “This incident reminded markets of the dark side of leverage and likely resulted in some market participants reducing their exposure to near record highs to avoid serious losses if sales broadened,” said Marios Hadjikyriacos, investment analyst at online Broker XM.

Major order for Boeing

Boeing
Boeing 250.52

Meanwhile, Boeing shares rose 2.3 percent after a major order. Southwest Airlines ordered 100 737 MAX planes, encouraging investors to join the Airbus rival. The first machines are said to be delivered in 2022.

Bitcoin was also in demand. The oldest and most important cyber currency again targeted the US $ 60,000 mark and rose by up to eight percent to US $ 58,400. The fact that the credit card provider Visa opened another door to the use of cryptocurrencies in general payment transactions was well received by the market. The US company announced that it will in future accept the use of the USD Coin cyber currency for payments.

The oil price initially fell slightly after the giant container ship “Ever Given”, which ran aground in the Suez Canal and which had blocked the important shipping route for around a week, was released. The Brent variety from the North Sea later showed little change at 64.62 US dollars per barrel (159 liters). The canal operator SCA announced that traffic in the waterway, which is immensely important for global shipping, will be resumed. However, it could be weeks, or possibly months, before the disruptions to the global shipping industry are resolved, leading container shipping companies said.

.