Hedge fund scandal is re-occupying Wall Street

NEW YORK (ANP) – The scandal surrounding the mysterious hedge fund Archegos is once again on the stock markets on Wall Street. That hedge fund invested with money borrowed from banks. With that product, Archegos would make money if stocks rose, but lose if stock prices went down. When the latter happened, the hedge fund did not comply with a request from the banks to make additional deposits. Big banks such as Goldman Sachs, Morgan Stanley and Citigroup therefore started to reduce positions, which led to a huge stock sale. Partly for this reason, ViacomCBS and Discovery Communications already lost a quarter of their value on Friday.

In the new trading week, those funds were again under pressure with minuses up to 6.7 percent. In addition, Chinese tech companies such as Baidu and iQiyi and the Canadian e-commerce company Shopify fell. They lost up to 5 percent. The banks that had to reduce their positions were also lowered. Earlier in the day, the Japanese Nomura and Credit Suisse from Switzerland already lost more than 16 and more than 14 percent respectively. US banks Goldman Sachs, Morgan Stanley and Citigroup performed better with losses of 0.5, 2.6 and 2 percent.

Ultimately, losses were confined to a small corner of the stock market. Moreover, most experts do not think that the excessive risk taken by the banks is a structural problem. They also look mainly at the support measures from the US government and the Federal Reserve, which are still supporting the market. Investors further responded to positive news about the US vaccination campaign against the corona virus.

Boeing

The Dow Jones index eventually closed with a gain of 0.3 percent at 33,171.37 points. The broadly curated S&P 500 lost 0.1 percent to 3971.09 points. Tech exchange Nasdaq was more affected by the declining tech funds as a result of the hedge fund scandal. That indicator yielded 0.6 percent to 13,059.65 points.

Boeing was also in the picture. The aircraft manufacturer received an order for 100 aircraft of the 737 MAX type from Southwest Airlines (minus 0.5 percent). In addition, an option was agreed for an additional order of 115 additional aircraft. Boeing won 2.3 percent.

Oil

Aircraft leasing company Fly Leasing shot up more than 27 percent due to an acquisition by investor Carlyle Group.

The price of a barrel of US oil rose 1 percent to $ 61.57. Brent oil became 0.8 percent more expensive at $ 65.06 a barrel. The euro was worth $ 1.1765, compared to $ 1.1779 at the close in Europe.

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