Credit Suisse, Goldman, Suez Canal, Oil, Amazon: 5 Things You Must Know

Bank stocks slump after it is revealed U.S.-based hedge fund Archegos Capital defaulted on margin calls; the container ship stuck in the Suez Canal 'has partially refloated,' economic data this week includes the U.S. jobs report for March.
Author:
Updated:
Original:

Here are five things you must know for Monday, March 29:

1. -- Stock Futures Slide as Banks Warn of Losses From Hedge Fund Default

Stock futures declined Monday and bank stocks slumped after it was revealed U.S.-based hedge fund Archegos Capital defaulted on margin calls.

Contracts linked to the Dow Jones Industrial Average fell 120 points, S&P 500 futures dropped 13 points and futures on the tech-heavy Nasdaq declined 19 points.

Credit Suisse  (CS) - Get Report and Nomura Holdings  (NMR) - Get Report warned Monday they face potentially “significant” losses from their exposure to the massive unwinding of leveraged equity bets by Archegos Capital.

Nomura estimated its claim against an unnamed U.S. client was about $2 billion. That client is Archegos, Bloomberg reported, citing people familiar with the matter. Nomura shares saw their biggest one-day drop in years.

“A significant U.S.-based hedge fund defaulted on margin calls made last week by Credit Suisse and certain other banks,” Credit Suisse said. “Following the failure of the fund to meet these margin commitments, Credit Suisse and a number of other banks are in the process of exiting these positions.”

Goldman Sachs  (GS) - Get Report has been telling shareholders and clients that any losses it faces from Archegos were likely to be immaterial, a person familiar with the matter told Bloomberg. The stock fell 3.28% to $316.66 in premarket trading Monday.

The more than $20 billion of positions that Archegos sold to meet margin calls included ViacomCBS  (VIACA) - Get Report and Discovery  (DISCA) - Get Report, which dropped 25.6% and 27.45%, respectively, on Friday. 

Stocks finished higher Friday as investors cheered progress on vaccine distribution and optimism about the prospects that the economy would recover strongly from the coronavirus pandemic grew. The Dow and S&P 500 posted record closing highs.

Goldman Sachs is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells GS? Learn more now.

2. -- Ship Stuck in Suez Canal 'Partially Refloated'

The container ship stuck in Egypt's Suez Canal, one of the world's most important waterways for trade, "has partially refloated," according to Norway-based Leth Agencies.

Refloating operations for the Ever Given were "still ongoing" at the canal, a spokesman with Bernhard Schulte Shipmanagement told TheStreet.

Richard Skogheim, deputy operations director of Leth Agencies, told TheStreet on Sunday that a plan to make a major attempt midnight in Egypt was pushed back by about 18 hours to allow for higher tides and more powerful tug boats.

"They are waiting on two tugs to arrive, and they believe it will have more impact," said Skogheim.

Shoei Kisen, the Panama-flagged ship’s Japanese owner, told the Associated Press that the bow of the ship had moved slightly but was still touching the seafloor, and it was unclear how long it would take to fully reopen the canal.

About 12% of global trade by volume flows through the canal.

Oil prices turned higher Monday, with West Texas Intermediate crude, the U.S. benchmark, up 0.66% to $61.37 a barrel.

3. -- Jobs Report and Manufacturing on This Week's Calendar

The U.S. economic calendar this week includes the Conference Board's Consumer Confidence Index, the ADP National Employment Report, Jobless Claims, the ISM Manufacturing Index and U.S. Nonfarm Payrolls for March.

The jobs report will be released on Good Friday, a day when stock markets will be closed. The last time that occurred was in 2015, and it only has happened 12 times since 1980, according to Dow Jones Market Data.

4. -- Walgreens, Lululemon and Chewy Report Earnings This Week

Cal-Maine Foods  (CALM) - Get Report is expected to report earnings Monday. Companies issuing earnings reports later in the week include Lululemon  (LULU) - Get Report, Chewy  (CHWY) - Get Report, BlackBerry  (BB) - Get Report, McCormick  (MKC) - Get Report, Micron  (MU) - Get Report, Walgreens Boots Alliance  (WBA) - Get Report and CarMax  (KMX) - Get Report.

Top Earnings to Watch This Week: Walgreens, Micron, McCormick

5. -- Voting to Unionize at Amazon Warehouse Closes Monday

Voting to form a union comes to a close Monday at an Amazon.com  (AMZN) - Get Report warehouse in Alabama.

Employees have cited cited poor working conditions, such as relentless quotas and complaints that they don't even have time to use the bathroom.

The online retailing and tech giant has encouraged its workers to vote “no” at the warehouse outside Birmingham, Alabama. Amazon has argued the warehouse created thousands of jobs with an average pay of $15.30 per hour - more than twice the minimum wage in Alabama. 

If the union is approved, it would be a first for Amazon workers in the United States.

Amazon is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells AMZN? Learn more now.