DIS Stock – Archegos, ViacomCBS and DraftKings: 5 Things You Must Know
Here are five things you must know for Tuesday, March 30:
1. — Stock Futures Are Mixed and Yields Are Climbing
Stock futures were mixed Tuesday and Treasury yields climbed as hopes rose for an economic recovery as the vaccine rollout in the U.S. was showing rapid progress.
Traders also weighed whether the implosion of U.S. hedge fund Archegos Capital will be isolated or exposure to the situation will spread to other banks.
Ten-year Treasury yields rose to 1.772% early Tuesday, near 14-month highs.
Vaccines from Moderna (MRNA) – Get Report and Pfizer (PFE) – Get Report, meanwhile, were “highly effective” in preventing COVID-19 infections “in real-world conditions among health care personnel, first responders, and other essential workers,” U.S. health officials said.
The Dow Jones Industrial Average on Monday closed at a record in mixed trading Monday as investors weighed the uncertain fallout of the forced liquidation of positions held by Archegos Capital.
Credit Suisse (CS) – Get Report and Nomura Holdings (NMR) – Get Report warned they face potentially significant losses from their dealings with Archegos. Goldman Sachs Group (GS) – Get Report has told clients that any losses it faces from Archegos likely were to be immaterial.
Jim Cramer reviewed the Archegos drama for Real Money here.
President Biden is expected to unveil Wednesday a two-pronged stimulus package with a focus on infrastructure and jobs.
2. — ViacomCBS Rebounds Amid Archegos Drama
Shares of ViacomCBS (VIACA) – Get Report were rising more than 6% in premarket trading Tuesday after the media giant lost more than half its value last week in a collapse caused by the forced selling by hedge fund Archegos.
The stock had risen roughly ninefold over the course of a year before its steep drop, according to Dow Jones Market Data.
Discovery (DISCA) – Get Report also was hit hard last week as part of the hedge fund’s unwinding.
Both stocks posted double-digit percentage declines on Friday amid forced liquidation of positions linked to Archegos.
ViacomCBS and Discovery were brought down by giant block trades initiated by Goldman Sachs and Morgan Stanley after Archegos – the family office of former Tiger Management trader Bill Hwang – reportedly failed to meet margin calls.
ViacomCBS shares early Tuesday were up 6.29% to $50, while Discovery gained 1.31% to $41.77.
3. — Tuesday’s Calendar: Chewy and Lululemon Earnings, Consumer Confidence
Earnings reports are expected Tuesday from Chewy (CHWY) – Get Report, McCormick (MKC) – Get Report, Lululemon Athletica (LULU) – Get Report, BlackBerry (BB) – Get Report, BioNTech ((BNTX)) – Get Report and PVH (PVH) – Get Report.
What Jim Cramer Expects From Lululemon Earnings
The U.S. economic calendar for Tuesday includes the Case-Shiller Home price Index for January at 9 a.m. ET and Consumer Confidence for March at 10 a.m.
4. — DraftKings Edges Higher After Sharp Slump
DraftKings (DKNG) – Get Report shares were up 1.36% to $58.99 in premarket trading Tuesday after sliding following a report from Deutsche Bank that said the future of online sports betting in New York state was “hanging by a thread.”
The stock tumbled 8.49% on Monday after analyst Carlo Santarelli said in a research note that comments from New York officials “appear far more pessimistic” than those made several weeks ago around the prospects of legalizing online sports betting during this budget session.
While the matter likely will be settled by the end of the week, Santarelli added, “the early read, and our view, is that there are too many variant agendas and too little time to get this issue sorted out in this budget session.”
Penn National Gaming PENN, which slumped 7.85% on Monday, traded down slightly early Tuesday to $98.15.
5. — Cramer Says Use Weakness to Buy Favorite Reopening Stocks
Jim Cramer, the founder of TheStreet, told viewers of his “Mad Money” program they should use days like Monday to buy their favorite reopening stocks into weakness and sell their lockdown stocks into strength.
Cramer said Monday’s halt in the reopening rally was caused by two factors. First was the liquidation of hedge fund Archegos. The second was the chilling warning of “impending doom” issued by the director of the Centers for Disease Control. Cramer said the dire warning against reopening the U.S. economy too soon put the brakes on the entire reopening trade, at least for now.
Ultimately, however, Cramer said he’s not making any short-term bets on the FAANG stocks (Cramer’s acronym for Facebook (FB) – Get Report, Apple (AAPL) – Get Report, Amazon (AMZN) – Get Report, Netflix (NFLX) – Get Report and Alphabet’s Google (GOOGL) – Get Report) or the rest of the technology sector.