The daily business briefing: March 29, 2021
The ship blocking the Suez Canal is partially refloated, investment banks warn of losses from hedge-fund default, and more
Ship blocking Suez Canal partially refloated
The Suez Canal Authority said Monday that the massive cargo carrier blocking the waterway had been 80 percent refloated, and that tugboats would try again at the next high tide to free the grounded vessel. "It is good news," said Osama Rabie, chairman of the Suez Canal Authority. "We are not finished yet, but it has moved." At least 320 vessels are waiting to pass through from the Red Sea to the Mediterranean or vice versa, costing billions of dollars a day. Engineers have been working to clear the ship, digging the protruding bow out from the bank and vacuuming up sand from the bottom of the canal. They had been hopeful that high spring tides accompanying Sunday's full moon would aid the effort.
Investment banks warn of pain from hedge fund default
Global investment banks Nomura and Credit Suisse said Monday they faced major losses after a U.S. hedge fund defaulted on margin calls. Losses at the hedge fund, identified by Reuters sources as Archegos Capital, touched off a stock liquidation on Friday. Nomura warned it could be hit with $2 billion in losses; Credit Suisse said the hedge fund's troubles could have a "highly significant and material" impact on its first-quarter results. Nomura shares plunged by 16.3 percent, the stock's biggest single-day decline ever. Credit Suisse shares fell by 14 percent. Other banks' shares also fell, with Deutsche Bank down by 5 percent and UBS by 3.8 percent.
Biden set to unveil major infrastructure proposal
President Biden plans to present his next big spending push in two pieces, starting with the unveiling of a massive infrastructure proposal this week, White House Press Secretary Jen Psaki said on Fox News Sunday. The plan includes spending on bridges and roads that have bipartisan appeal. The infrastructure plan will include green-energy programs that are part of Biden's efforts to fight climate change. In April, Biden will present the second part of his plan, which will center around child care and healthcare programs, Psaki said. Democrats argue that Biden's spending plans will boost growth and household incomes, while making the economy more productive. Republicans say the spending would be wasteful and require big tax increases.
Stock futures fall after Friday's rally
U.S. stock index futures fell slightly Monday morning after a Friday rally that lifted the S&P 500 to a record high close. Futures for the S&P 500, the Dow Jones Industrial Average, and the tech-heavy Nasdaq were down by about 0.5 percent several hours before Monday's opening bell. Traders are bracing for market volatility to continue as pension funds and other major investors balance their holdings at the end of the first quarter, with the potential for big changes as money managers make adjustments, taking into account the recent rise in bond yields. The trading week will be shortened by the Good Friday holiday, but the March jobs report, expected to show 630,000 jobs were added in March, is still scheduled to be released that day.
Popular children's author, Scholastic pull book over 'passive racism'
Scholastic has stopped circulation of a children's graphic novel by Dav Pilkey, the creator of the Captain Underpants series, saying it "perpetuates passive racism." The publisher said it made the decision last week to pull the book, The Adventures of Ook and Gluk: Kung-Fu Cavemen from the Future, with Pilkey's "full support." The book was first published in 2010, but Pilkey said in a letter posted on his YouTube Channel last Thursday that it was only brought to his attention last week that it contained "harmful racial stereotypes." "I wanted to take this opportunity to publicly apologize for this," Pilkey wrote. "It was and is wrong and harmful to my Asian readers, friends, and family, and to all Asian people."