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WEEKLY MARKET ROUND-UP – 26/04/21

Devastation after secretive hedge fund, Archegos Capital Management collapses

The dust is still settling among the world’s biggest investment banks after the implosion of the secretive hedge fund, Archegos Capital Management. Its collapse led to a $20bn asset ‘fire sale’ late last month and left the fund’s main margin lenders, Credit Suisse and Nomura, smarting with estimated losses of up to $7bn.
 
Credit Suisse has already taken a $4.7bn write down, dividends have been cut and buybacks suspended, heavy fines are on the horizon and the shares have fallen some 20% since the news broke. The Swiss lender is now parting company with much of its senior leadership.
 
The co-heads of its prime brokerage business have stepped down, as have the chief risk officer and the respective heads of investment banking, equities sales and trading, credit risk, counterparty credit risk and counterparty hedge fund risk.
 
This week it also came to light that, contrary to reports at the time, Morgan Stanley also suffered a $0.9bn loss as a result of Archegos Capital going bust.
Credit: Emile Wamsteker/Bloomberg News

Drama with US vaccine producer’s, Moderna and Johnson& Johnson

Shares in Moderna, one of the leading coronavirus vaccine producers, fizzed almost 7% on Friday (16 April). However, the shares gave back most of these gains on the next day of trading, Monday (19 April), falling some 6%, to be up around 45% in the year so far.
 
Investors had previously bid up Moderna’s shares after many US states began halting the use of Johnson & Johnson’s one-dose vaccine last week after federal health officials called for a pause due to the advent of rare but dangerous blood clots in those receiving the vaccine.
 
However, over the weekend, Dr Anthony Fauci, director of the National Institute of Allergy and Infectious Disease in the US told media outlets that the pause on using Johnson & Johnson’s vaccine will probably be lifted this week. “Everything is on the table,” he said.
 
Even so, Moderna is expected to generate coronavirus vaccine revenues of $10.85bn in 2021 and $15.75bn in 2022.
Credit: Marco Verch/ Flickr.com

Issues with vaccinations race and rise in infections

While the UK and US are the only major economies keeping pace with the leaders in the global vaccine rollout, the likes of France, Turkey and Argentina are experiencing a rapid rise in infections. The same is true of Chile, Bahrain and Qatar, despite them being leaders in the vaccination race
Source: Our World in Data/Statista. * Numbers counted as a single dose and may not equal the total number of people vaccinated.