Global Overview
U.S. Economy is Healing
The goods and service sectors are growing at rates simply not seen in a long time. March readings for the U.S. service and manufacturing growth came in at 63.7 and 64.7, respectively. A reading above 50 indicates growth.
The combined services and manufacturing score of 128.4 is the best reading on record by almost 9 points and corresponds to overall U.S. economic growth of between 5% and 6%, well above the 2.5% average of the past 20 years.
Archegos Aftermath
Credit Suisse would take a charge of $4.7 billion after its dealing with hedge fund Archegos Capital Management forced it to dump more than $2 billion worth of stock last week in a fire sale. Credit Suisse CEO Thomas Gottstein deemed the losses unacceptable and the bank announced that Brian Chin, head of investment banking, and Lara Warner, chief risk and compliance officer, will step down from their roles.
Credit Suisse said it now expects first-quarter losses at around 900 million Swiss francs ($960 million). The bank also suspended its share buyback program, cut its dividend by two thirds, and cancelled the bonuses of its senior management team for this year.
Capital Markets
Equities
| PX Last | 1W | YTD | |
|---|---|---|---|
| United States | |||
| S&P | 4 121.01 | 2.69% | 9.74% |
| NASDAQ | 13 831.47 | 3.12% | 7.32% |
| Europe | |||
| Euro Stoxx 50 | 3 975.45 | 0.99% | 11.90% |
| FTSE 100 | 6 889.83 | 1.82% | 6.65% |
| DAX | 15 240.79 | 1.21% | 11.09% |
Cruise Companies Are Up
Cruise industry stocks rose Monday after the Centers for Disease Control and Prevention issued guidance saying that cruise ship passengers are not required to be vaccinated, even though it still hasn’t given a specific timeline for sail dates. Shares of Norwegian rose 7.2% with Carnival rising 4.7% and Royal Caribbean up 2.9%.
The U.S. issued a no-sail order last March causing cruise lines, and their stocks, to take a beating. Carnival saw revenue fall from nearly $21 billion in 2019 to under $6 billion in 2020, for a 73% decline.
GM Fears Chip Shortage
General Motors said it is halting production at more of its North American factories so it can focus on its most popular and profitable vehicles like the Chevy Silverado and GMC Sierra. After notching more than $6 billion in earnings in 2020, GM said the chip shortage could dent 2021 profits by as much as $2 billion.
Ford, which also extended chip-related shutdowns last week and has been forced to cut production of its popular F-150 pickup, estimated losses of as much as $2.5 billion.
Private Equity & Venture Capital
Germany – Europe’s Newest VC Leader
Germany has emerged as one of Europe’s leading venture capital hubs according to PitchBook, but when it comes to late-stage deals, the country’s investors are largely sitting on the sidelines. VC funding in Germany during 2020 saw a 20% increase year-over-year, according to PitchBook data, with two-thirds of the capital raised going to late-stage transactions.
Last year, US investors participated in a record 150 deals worth €4 billion (about $4.7 billion), PitchBook data found. There is concern that the startups raising capital from foreign VCs will end up moving their operations abroad.
Commodities & Digital Assets
| PX Last | 1 Week | YTD | |
|---|---|---|---|
| Brent Crude | 62.95 | -0.99% | 24.65% |
| Gold | 1 742.9 | 1.64% | -8.79% |
| BTC/USD | 59 938 | 3.27% | 103.19% |
Crypto Payments are Here
Cryptocurrency exchange Coinbase said Thursday that it will begin trading on April 14, after receiving regulatory clearance for its direct listing from the Securities and Exchange Commission.
The company has said it plans to register nearly 115 million shares of Class A common stock, which will trade under ticker symbol COIN. In a direct listing, the issuing company forgoes selling new stock and instead allows existing stakeholders to sell their shares to new investors.
