Todays Market Summary 03/29 – #stocks chatter


Todays Market Summary 03/29

We started off this week dealing with the fall out of a massive margin call that was executed in large part by [Goldman Sachs and Morgan Stanley]( to cover losses incurred by Archegos Capital when their leveraged positions with Viacom ($VIAC) and Discovery ($DISCA) went haywire. Bill Hwang who runs Archegos Capital had been acquiring positions in both Viacom and Discovery through highly leveraged swaps. The straw that broke the camels back was a [$3 Billion dollar equity offering]( by Viacom to fund their streaming business which caused a 29% decline in the stock price, which greatly affected the value of Archegos swaps. The losses proved to be too great for Goldman Sachs and Morgan Stanley’s personal risk tolerance as they demanded more collateral from Archegos to cover their losses. When Archegos was unable to do so, a $20 Billion dollar liquidation was initiated as multiple banks forced closed Archegos positions in block trades. (Block Trades are large trades negotiated between a buyer and seller, usually institutional, that is done off of the open market.) [Baidu, Tencent Muisc, Vipshop Holdings, Viacm, Discover, Farfetch, iQiyi, and GSX Techedu]( all had positions closed and faced selling pressure as apart of the margin call.

On Monday, US banks faced a sell off of their own as investors grew concerned about losses they may have faced as a result of Archegos Margin Call[. It is currently being reported that the total global losses may be as large as $6 Billion dollars]( Morgan Stanley shares fell 2.6%, Goldman Sachs dropped 1.7%, Deutsche Bank dropped 5%, UBS was down 3.8%, Creduit Suisse plummeted 14%, and Nomura suffered the worst with a 16.3% decline. Nomura warned in a statement that their loss may have been as large as $2 Billion dollars. There are rumors that one bank may have lost up to $4 Billion.

**Suez Canal Re-Open for business**

After being stuck sideways for nearly a week, the Ever Given container ship, which stands larger than the entire state building, has been unstuck from the Suez Canal. It was reported that the ship got stuck due to [strong winds from a sand storm]( This resulted in many transport ships containing goods and materials becoming blocked as they were unable to travel to their destinations. It was initially believed that the dig-out effort could last weeks to get the ship unstuck causing many ships to detour around Africa to make it to their destination. It was estimated that [$400 Million dollars an hour]( in goods were being blocked from entering the canal.

In the end, tug boats and dredgers prevailed and were able to free the ship from the banks which lead to the reopening of the canal. Shortly after the hashtag #Putitback started trending on twitter as some people seemingly wanted the boat to stay stuck for meme purposes. The unsticking of the boat had no immediate effect on the market as stocks remained mixed for the day. The S&P 500 closed nearly unchanged, the Nasdaq closed down .6%, while the Dow Jones closed up .32% for a new record high.

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