U.S. stock futures edged lower Monday after a large investment fund unwound billions of dollars in holdings, triggering concerns that stocks in the portfolio and banks who dealt with the firm could face sharp losses.
S&P 500 futures ticked down 0.5% and futures on the Dow Jones Industrial Average slid 0.3%. Changes in futures don’t necessarily predict movements after the markets open.
Late last week, Morgan Stanley, Goldman Sachs Group and Deutsche Bank unloaded large blocks of shares in Viacom CBS, Discovery and other companies as part of the liquidation of positions by Archegos Capital Management. The sales approached $30 billion in value, people familiar with the matter said, and led to stocks in those companies plummeting. Market participants called the size and speed of these sales unprecedented.
Global investment banks Credit Suisse Group and Nomura Holdings on Monday said they could incur substantial losses from dealings with a U.S. client. Neither bank named its respective client.
In the bond market, 10-year U.S. Treasury yields fell to 1.635% from 1.658% on Friday. Yields move inversely to bond prices.
Overseas, the Stoxx Europe 600 was relatively flat.
The Swiss franc strengthened 0.1% against the U.S. dollar, with 1 franc buying $1.07. The euro was down 0.1% against the dollar, with 1 euro buying $1.18. The British pound was mostly flat against the U.S. dollar, with 1 pound buying $1.38.
In commodities, Brent crude slipped 1% to $63.76 a barrel. Gold also slipped 0.4%.
In Asia, indexes were mixed. Japan’s Nikkei 225 index rose 0.7% and China’s benchmark Shanghai Composite added 0.5%, whereas Hong Kong’s Hang Seng ended the day flat.