Bend Don’t Break… US indices were modestly red through the morning but nonetheless there’s been a collective sigh of relief as it seems the fallout from the “once in a decade” series of margin calls on the highly-leveraged positions of Archegos Capital Management will be relatively contained. A few prime brokerage banks caught up in the mess are smarting today as they work to minimize their own damages (GS -1.4%, MS -3.0%, WFC -3.5%), but given how “on edge” investors have been with stocks at ATHs, many are glad the saga doesn’t seem to carry wider systemic ramifications. That relief has picked up into the afternoon, and now even the battered Media space has turned green, with broker upgrades to Facebook (FB +2.6%) and Twitter (TWTR +2.2%) covering up for continued weakness in the names at the center of Friday’s drama (VIAC -6.2%, DISCK -1.2%). The reflation trade appears to have the day off to start this holiday-shortened week: the 10-year yield remains relatively well-behaved right around 1.7% as quarter-end rebalancing provides some much-needed support for Treasuries. Energy joins Banks/Financials in taking a breather near the bottom of the sector table, even as as crude remains positive in the face of reports that the Ever Green cargo ship has been refloated in the Suez Canal. Defensives fill in the top spots, with Utilities, Household Goods, and Telcos all outperforming. All the choppiness hasn’t stopped the Dow from challenging for a new closing high, as Boeing (BA +2.3%) is carrying the price-weighted index higher on back of an order for 100 737Max planes from Southwest Air (LUV -0.4%).
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