Markets set for a negative start as hedge fund Archegos spooks traders

Wall Street

Futures point to a slightly lower open

U.S. stock futures were lower on Monday, suggesting Wall Street will start the week in the red after banks Credit Suisse and Nomura warned they could face significant losses because of their exposure to margin calls reportedly defaulted by hedge fund Archegos Capital Management.

Bloomberg News, citing people two people familiar, reported that Archegos Capital was forced to sell more than $20 billion of stocks on Friday after margin calls.

Credit Suisse warned the sell-off could have a “highly significant and material” impact on its first-quarter results, while Nomura said it could face a total wipeout of its earnings for the second half of this year.

As of 5:20 a.m. ET, futures tied to the blue-chip Dow moved 171 points, or 0.52% lower to 32,783. S&P 500 futures gave away 22.75 points, or 0.57% to 3,942 while the tech-heavy Nasdaq 100 futures dropped 73 points, or 0.56% to 12,893.75.

Suez Canal authorities partially free and refloat Ever Given ship; Crude sinks

Crude futures also moved lower early Monday amid reports that salvage teams partially freed and refloated the massive Ever Given ship stuck in the Suez Canal, raising hopes that the important waterway could soon resume operations and reduce the economic fallout of the disruption.

The ship became jammed in the canal due to high winds early last Tuesday, stopping traffic on the shortest shipping route between Asia and Europe.

As of 5:20 a.m. ET, U.S. West Texas Intermediate (WTI) crude futures were at $60.64, down 33 cents, or 0.54% a barrel. International Brent crude futures tumbled 11 cents, or 0.17% to $64.32 a barrel.

Biden reportedly planning to split spending plan in two

Meanwhile, market participants will be awaiting comments from President Joe Biden about his infrastructure plan that could cost more than $3 trillion. Biden is expected to provide more details of his plan when he goes to Pittsburgh later this week.

According to White House press secretary Jen Psaki who spoke to Fox News on Sunday, the president plans to unveil two packages in the coming months, one covering infrastructure and another covering child-care and health-care.

Documents reviewed by the New York Times showed that the plan could include $1 trillion dedicated largely to repairing and building physical infrastructure, with a focus on combating climate change.

CM Life Sciences II SPAC said to be nearing deal to merge with SomaLogic

SPAC CM Life Sciences II (NASDAQ: CMIIU), the special purpose acquisition company backed by life-sciences investor Casdin Capital and activist Keith Meister’s Corvex Management LP, is nearing a deal to take SomaLogic public, according to the Wall Street Journal.

According to the Journal, the deal values SomaLogic at $1.25 billion and could be announced as soon as today.

Gene-sequencing company Illumina (NASDAQ: ILMN), Cathie Wood’s ARK Investment Management, and a Softbank unit are set to supply the company with a $375 million pipe.