U.S. Stocks Continue to Skid After Archegos Sell-Off and Treasury Yield Increase

Market indicators like the Dow and Nasdaq continued lower at market open on the heels of news from the U.S. Treasury that the yield on 10-year bonds rose to over 1.75%.

The Dow has fallen 104 points to 33,066 (-0.31%), while the S&P 500 dipped 20 points to 3,950 (-0.51%). The Nasdaq fell 102 points to 12,957 (-0.79%) as tech stocks continued to bleed from yesterdays poor performance in the market.

Tech stocks are likely responding to the increased yield on U.S. Treasury 10-year bonds, which is now up to 1.753% in this morning’s market.

The liquidation of Archegos Management Fund and its deal over ViacomCBS and Discover Inc. continues to cause turmoil as investors figure out how a family run investment fund using its own money could have such an affect on the stock market. 

Financial expert Prof. John Coffey spoke live on Yahoo Finance this morning, saying that banks like Credit Suisse, who were hit particularly hard by the sell-off, were unaware that Archegos had $30 billion invested in so few stocks due to the nature of the contracts-for-difference (CFDs) that were used. Coffey said regulation of these swaps would be necessary to prevent small family-based investment firms from having such an effect on the market.

Cryptocurrency continued its resurgence this morning, with Bitcoin holding around $58,000 in value and Ethereum now pushing the midpoint of the $1,800 value milestone it hit last week. The crypto boost seems to be fueled by Visa’s recent deal with Crypto.com, allowing them to pay Visa in USD Coin for services tendered. 

European markets remained largely unfazed by turmoil in the U.S. markets. The Stoxx 600 is up over 2 points to 430 (+0.57%) and London’s FTSE 100 clocked a 30 point gain to 6,767 (+0.46%). The DAX had a stellar day, pushing a gain of over 147 points to 14,965 (+1%).

Asian markets also maintained their momentum from Monday, with Shanghai’s Composite Index (SHCOMP) posting a gain of 21 points to 3,456 (+0.62%). Hong Kong’s Hang Sang Index (HSI) saw a staggering 239 point increase to 28,577 (+0.84%) while Japan’s Nikkei 225 slowed slightly, gaining only 48 points today to 29,432 (+0.16%).


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