Stocks Decline as Traders Weigh Extent of Unwind: Markets Wrap

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(Bloomberg) — U.S. stocks declined from record highs as traders weighed the level of contagion from forced block trades through financial markets.

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Financial and energy shares pushed the S&P 500 down following revelations that Archegos Capital Management LLC — the family office of Bill Hwang — was behind a $20 billion spree of block trades on Friday, selling Chinese tech giants and U.S. media firms. Goldman Sachs Group Inc. and Morgan Stanley fell. ViacomCBS edged lower, Discovery Inc. was little changed and the American Depositary Receipts of some Chinese companies gained. Credit Suisse Group AG fell as much as 15% in Europe.

Credit Suisse, Nomura Slump as Banks Tally Archegos Damage

“There’s always a fear of when you hear about a run on a bank or margin calls, there’s always fears of — is this going to be systemic event?” said Leslie Thompson, managing member of Spectrum Management Group.

© Bloomberg By some measures, U.S. equity-market valuations already top dot-com era

A dollar gauge rose and 10-year U.S. Treasury yields were little changed. The Stoxx 600 gauge extended its highest level in 13 months.

Investors are focusing on the strength of the recovery, aided by vaccines, and inflation risks. Later this week, U.S. President Joe Biden plans to unveil a further stimulus program with a tilt toward infrastructure. U.S.-China ties are also in focus, after a report that Washington isn’t ready to lift tariffs on Chinese imports in the near future, but may be open to trade talks.

West Texas Intermediate crude declined. Traders focused on the demand impact of renewed coronavirus lockdowns before the OPEC+ policy discussions on Thursday. Meanwhile, the Ever Given was freed in a step toward reopening the Suez Canal to traffic.

Elsewhere, Bitcoin headed for the biggest one-day gain in two weeks.

Some key events to watch this week:

President Biden is expected to unveil his infrastructure program Wednesday.EIA crude inventory report Wednesday.OPEC+ meets to discuss production levels for May on Thursday.China Caixin PMI due Thursday.U.S. employment report for March on Friday.Good Friday starts the Easter weekend in countries including the U.S., U.K., France, Germany, Australia and Canada.

These are some of the main moves in financial markets:

Stocks

The S&P 500 Index decreased 0.3% to 3,963.30 as of 9:54 a.m. New York time.
The Dow Jones Industrial Average declined 0.1% to 33,052.54.
The Nasdaq Composite Index dipped 0.4% to 13,088.90.
The Nasdaq 100 Index sank 0.5% to 12,917.81.
The Stoxx Europe 600 Index advanced 0.3% to 428, the highest in about 13 months.

Currencies

The Bloomberg Dollar Spot Index increased 0.2% to 1,150.28.
The euro decreased 0.1% to $1.1777.
The British pound advanced 0.1% to $1.3804, the strongest in a week.
The Japanese yen depreciated 0.1% to 109.75 per dollar, the weakest in a year.

Bonds

The yield on 10-year Treasuries advanced one basis point to 1.69%, the highest in a week.
The yield on 30-year Treasuries gained one basis point to 2.39%, the highest in a week.
Germany’s 10-year yield climbed two basis points to -0.33%, the highest in a week.
Britain’s 10-year yield increased two basis points to 0.776%, the highest in a week.

Commodities

West Texas Intermediate crude declined 1.2% to $60.25 a barrel.
Gold depreciated 1.5% to $1,706.35 an ounce, the weakest in three weeks on the largest fall in almost four weeks.

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