Monday March 29th


Stock futures lower as impacts continue to be felt from margin-call rout

U.S. stock index futures added to losses Monday amid weakness in bank stocks caught in the downdraft of Friday’s margin call, though media shares rebounded after the stunning late-week selloff. Futures on the Dow Jones Industrial Average implied an opening loss of about 180 points. S&P 500 futures and Nasdaq 100 futures also traded in negative territory. Shares of ViacomCBS and Discovery both rebounded after coming under intense selling pressure last week. The two companies were believed to be hit by forced liquidation of positions held by the multibillion dollar family office Archegos Capital Management, a source familiar with the situation told CNBC. Discovery gained more than 4% in premarket trading Monday while ViacomCBS rose more than 2%. The two companies had lost 27% apiece during Friday’s selloff. Elsewhere, Boeing was up 2.6% premarket on news that Southwest Airlines had added 100 orders for the airliner’s 737 Max jet. The first 30 jets are scheduled for delivery in 2022. However, futures overall were indicating negative. Credit Suisse shares tumbled 13% as the bank warned it would face a “significant” hit to its first-quarter results due to the bank having to exit hedge fund positions relaed to the forced selling. Bank stocks weighed on the Dow industrials, with Goldman Sachs down more than 3% and JPMorgan Chase off 1.4%. The weakness came as government bond yields edged lower to start the week. On Friday, all three major benchmarks rallied to their session highs into the close with the blue-chip Dow closing about 450 points higher. The S&P 500 eventually climbed 1.7% to hit a record closing high. The Nasdaq Composite wiped out a 0.8% loss and ended Friday 1.2% higher. Traders are bracing for heightened volatility during this holiday-shortened week with quarter-end rebalancing among pension funds and other big investors. The recent swift advance in bond yields could set up money managers for big adjustments in their portfolios. The Dow and the S&P 500 have risen 6.9% and 4.3%, respectively, so far in March. The tech-heavy Nasdaq, however, has dipped 0.4% this month as some investors jumped high-flying technology names amid rising yields. Investors are awaiting updates from President Joe Biden about his infrastructure plan which could cost north of $3 trillion. The president is expected to unveil his plan when he travels to Pittsburgh on Wednesday. White House press secretary Jen Psaki said Sunday Biden plans to roll out two packages in the coming months, the first covering infrastructure and the second covering health and family care. “The market isn’t placing very high odds on this infrastructure/tax blueprint coming to fruition and while Biden probably won’t get everything he’s asking for, Congressional Democrats and the White House are VERY intent on passing some substantial bills in the coming months,” Adam Crisafulli, founder of Vital Knowledge, said in a note. The stock market is closed for the Good Friday holiday, but the March jobs report is still slated for release that morning. Economists expect 630,000 jobs were added in March, and the unemployment rate fell to 6% from 6.2%, according to Dow Jones. Stocks in Asia-Pacific were mixed on Monday, as markets in India were closed for a holiday. The Nikkei 225 in Japan gained 0.71% to close at 29,384.52 while the Topix index advanced 0.46% to finish its trading day at 1,993.34. South Korea’s Kospi closed 0.16% lower at 3,036.04. Mainland Chinese stocks were higher on the day as the Shanghai composite gained 0.5% to 3,435.30 while the Shenzhen component was marginally higher at 13,771.26. Hong Kong’s Hang Seng index closed little changed at 28,338.30. Oil rose on Monday on expectations that the OPEC+ group of leading producers will keep output unchanged in May, and worries that operations in the Suez Canal might take weeks to return to normal even though a ship blocking it has been partly refloated. Brent oil rose 58 cents, or 0.9%, to $65.15 a barrel. U.S. crude was up 40 cents, or 0.7%, at $61.37 a barrel. Gold prices slipped on Monday as a stronger U.S. dollar and hopes for a swift global economic recovery boosted share markets, denting demand for safe-haven bullion. Spot gold was down 0.4% at $1,724.60 per ounce. U.S. gold futures slipped 0.6% to $1,722.80.