Stocks hover near records, job openings galore, illuminating earnings preview, Credit Suisse, euro bottom in place, bitcoin consolidates

FX

The euro is slightly higher as the outlook for Europe improves with the majority of Europeans now expected to get vaccinated by the end of June.  Also providing a boost for risk appetite was the IMF’s second upgrade this year for the 2021 global economic growth forecast.  The euro bottom appears to be in place and 1.1875 should prove to be tentative resistance.

Credit Suisse hit by massive Archegos loss

The fallout with Archegos Capital’s margin call is having Credit Suisse end up as one of the big losers.  The bank will take a USD4.7 billion writedown, proposes a reduced dividend of CHF0.10 per share, and now expects to report a pretax loss for Q1 of approximately CHF900 million.  Credit Suisse noted that both the US hedge fund and the supply chain finance fund matters require substantial further review and scrutiny.

Wall Street is happy the bank is taking action and seems to support today’s changes in management.  Both Brian Chin, CEO of the Investment Bank and Lara Warner, Chief Risk and Compliance Officer will step down.  The Swiss lender appears to have all the bad news priced in as shares seem to have found strong support at the 10.00 level. Given the recent outperformance with financials, many traders might remain cautious about jumping back into Credit Suisse and wait and see if bond yields start to trend higher again.

Cryptos

Massive endorsements from Visa, Morgan Stanley, and Goldman Sachs have delivered a new wave of enthusiasm and momentum for the cryptocurrency world.  It seems every week a new major financial institution is jumping on the bitcoin bandwagon and many retail traders are looking to diversify their crypto holdings into many other altcoins.  The NFT craze has triggered a wave of interest into Ether and right now so bitcoin could underperform in the short-term.

Flows into bitcoin are also slowing down dramatically since the end of last year, so a healthy consolidation could be in the cards.

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