US banks and other affected stocks recovered from turmoil | 03/30/21


US financials, hit by speculation over troubles at the Archegos hedge fund, and other recently troubled stocks rebounded on Tuesday.

In the (Dow Jones 30 Industrial, shares of Goldman Sachs and JPMorgan ChaseCo took the lead with gains of 2.0 and 1.5 percent, respectively.

In the broad market followed the stocks of Bank of America, Morgan Stanley and Citigroup between 1.7 and 2.7 percent upwards. According to experts, the recovery in US bond yields also helped because higher market interest rates are beneficial to the industry. But the recently 2.8 percent higher shares of Wells Fargo recovered particularly strongly after the bank announced on Tuesday that it had closed all positions with Archegos – and this without incurring losses.

In general, it was said on the market that the Archegos speculations had been quickly ticked off by investors the day before. Market strategist Stephen Innes from broker Axi spoke of a “storm in a glass of water”. The reports had caused turbulence in the banking industry the day before. Goldman Sachs shares, for example, had slipped the previous day to their lowest level since early March.

According to Bloomberg news agency, the hedge fund had to sell more than $ 20 billion worth of shares on Friday because of margin calls. The Wall Street Journal even reported sales of $ 30 billion. According to insiders, the default is costing some big banks dearly, the Swiss bank Credit Suisse and the Japanese institute Nomura had already warned of possible high losses.

Archegos was apparently heavily invested in highly speculative investments – and had to spontaneously settle positions on a scale that caused sharp price fluctuations in some stocks in the past few days. These included those of the media groups ViacomCBS and Discovery Communications, whose prices had more than halved within a few days. Now they recovered by 4.8 percent in the case of Viacom and by more than 10 percent in the case of Discovery.

But also in the case of some of the papers of Chinese Internet companies traded in the USA, stronger swings were recently associated with Archegos. Baiducom stocks rebounded eight percent on Tuesday.

/ tih / fba / he



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