US futures fall, European stocks pared gains after block trades

Bloomberg

US equity-index futures fall and European stocks pared gains as traders braced for potential fallout from a wave of forced selling that rattled nerves and took the shine off a record Wall Street close. Oil slid after the ship blocking the Suez Canal was refloated.
Contracts on the S&P 500 declined following revelations that Archegos Capital Management LLC — the family office of Bill Hwang — was behind a $20 billion spree of block trades, selling Chinese tech giants and US media firms. With a number of banks said to be exposed to Archegos, investors are on the lookout for signs of contagion. ViacomCBS Class B shares
declined in premarket trading in New York.
Nomura Holdings Inc. plunged by a record amount after warning of a possible “significant” loss said to be related to the unwinding of trades. While Credit Suisse Group AG falls as much as 15%, the Stoxx 600 Index was little changed as gains for defensive sectors including food and health care were offset by losses for cyclical sectors such as banks and commodities.
“I don’t necessarily see that we’re going to have a big correction even with these block trades going on in the market,” Carol Pepper, Pepper International chief executive officer and founder, said on Bloomberg TV. “There is not a lot of bad news lurking that’s going to truly cause a major correction at least the next two to three months, therefore your dips are going to be modest.”
West Texas Intermediate crude slid as much as 2.6% after the Ever Given was refloated in a first step to reopening the Suez Canal to traffic. A dollar gauge rises and 10-year US Treasury yields slipped.
Investors are focusing on the strength of the recovery, aided by vaccines, and inflation risks. Later this week, US President Joe Biden plans to unveil a further stimulus program with a tilt towards infrastructure. US-China ties are also in focus, after a report that Washington isn’t ready to lift tariffs on Chinese imports in the near future, but may be open to trade talks.
Elsewhere, a gauge of Asia-Pacific shares was modestly higher.
Futures on the S&P 500 Index falls by as much as 0.5% as of 9:25 am London time and the Stoxx Europe 600 Index rises less than 0.1%.
While the MSCI Asia Pacific Index gained 0.2%, the MSCI Emerging Market Index added 0.1%. The Bloomberg Dollar Spot Index advanced by as much as 0.2% and the euro
declined 0.2% to $1.1771.
The British pound erased losses at $1.38 and the onshore yuan weakened 0.3% to 6.5624 per dollar. The Japanese yen strengthened 0.1% to 109.58 per dollar.
The yield on 10-year Treasuries slipped two basis points to 1.66% and the yield on two-year Treasuries decreased one basis point to 0.13%.
While Germany’s 10-year yield rise one basis point to -0.34%, Britain’s 10-year yield added one basis point to 0.77%. Japan’s 10-year yield falls one basis point to 0.075%.
West Texas Intermediate crude declined 1.1% to $60.31 a barrel and Brent crude dipped 0.6% to $64.20 a barrel. Gold weakened 0.4% to $1,725.77 an ounce.