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    Three reasons March should act as a 'springboard' for stocks into April

    In this article.SPXUS10YXLKXLEXLVXLPXLUXLCCFRA’s Sam Stovall sees three reasons April should spell gains for stocks.Stovall, who’s known for building market forecasts based on historical trends, highlights market instability over the past two weeks as his top bullish signal.”The period after the Ides of March is typically volatile — actually falling about 60% of the time,” the firm’s chief investment strategist told CNBC’s “Trading Nation” on Monday. “Whenever that has happened, it sort of set up a nice springboard into April.”So far this month, the S&P 500 is up more than 4%. However, the index is virtually flat since March 15. When the index slumps in March’s second half, Stovall finds a positive April happens 77% of the time.He lists corporations’ quarterly results as the second reason.”Earnings we expect to be up more than 15% in the first quarter of 2021,” said Stovall.A moderating benchmark 10-year Treasury Note yield is third on his list.”They’re not going up as dramatically as had been before,” said Stovall, who predicts the yield will fluctuate between 1.50% and 1.75% next month.He expects the S&P 500’s strength will persist through the second quarter.”Historically, the second quarter has been a favorable quarter for the market, up 2.8% on average going back to 1990,” Stovall said. “All sectors in the S&P have posted average increases in the second quarter since 1990.”Zoom In IconArrows pointing outwardsAccording to Stovall, technology, energy and health care have seen the highest average returns in Q2 over the last three decades. Even the Q2 top laggards — consumer staples, utilities and communication services — also grabbed gains, he finds.He believes this year will follow the trend, especially on Wall Street expectations President Joe Biden will successfully get an infrastructure spending package passed.”Investors are pretty much preparing for another round of stimulus,” Stovall said. “So, probably the cyclical sectors will be among the better performers as we move into the second quarter.”Disclaimer More

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    Biden says states should reinstate mask mandates and wait to reopen businesses as Covid cases rise

    President Joe Biden delivers remarks on Covid-19 response and vaccinations in the South Court Auditorium of the White House in Washington DC, on March 29, 2021.Jim Watson | AFP | Getty ImagesPresident Joe Biden on Monday urged governors and local leaders who dropped sweeping mask mandates to reinstate their orders, indicated some states should wait to reopen their economies while condemning “reckless behavior” likely to spur more infections.”Our work is far from over. The war against Covid-19 is far from won,” Biden said at a press briefing, where he announced a series of plans to vastly expand access to the vaccines in the coming weeks. “This is deadly serious.”CNBC Health & ScienceRead CNBC’s latest coverage of the Covid pandemic:One dose of Pfizer or Moderna vaccines was 80% effective in preventing Covid in CDC study of health workersCDC chief warns U.S. headed for ‘impending doom’ as Covid cases rise again: ‘Right now I’m scared’Biden says 90% of U.S. adults will be eligible for Covid shots by April 19New York expands Covid vaccine eligibility to all adults starting April 6, Cuomo says The president said he supports the warnings from Dr. Rochelle Walensky, director of the Centers for Disease Control and Prevention, who said earlier Monday that the U.S. is facing “impending doom” as daily Covid-19 cases begin to rebound once again. Biden also said he believes some states should pause their reopening plans amid the recent spike in cases.Walensky said during a news briefing earlier in the day that many states are reopening their economies even though the level of viral transmission remains too high. Walensky said she will ask governors on Tuesday to “refrain from opening up too fast.””I’m going to pause here, I’m going to lose the script, and I’m going to reflect on the recurring feeling I have of impending doom,” Walensky told reporters. “We have so much to look forward to, so much promise and potential of where we are and so much reason for hope, but right now I’m scared.”The U.S. recorded an average of 63,239 new Covid-19 cases per day over the last week, a 16% increase compared with a week ago, according to a CNBC analysis of data compiled by Johns Hopkins University. Daily cases are now growing by at least 5% in 30 states and the District of Columbia.While coronavirus hospitalizations and deaths typically lag infections, the daily number of fatalities has started to plateau. The U.S. is reporting a weekly average of 970 coronavirus deaths per day, a 3% decline compared with the week prior, according to data compiled by Johns Hopkins.”We’re giving up hard-fought, hard-won gains,” Biden said. “And as much as we’re doing America, it’s time to do even more.”Zoom In IconArrows pointing outwardsThe president pushed states and businesses to maintain, or reinstate, widespread mask mandates, saying a failure to take the virus seriously “is precisely what got us in this mess in the first place” and could lead to more infections and deaths.Top public health officials have urged states to tread with caution for weeks, warning that highly transmissible virus variants — particularly B.1.1.7 first identified in the U.K. — threaten to upend the nation’s progress after infections declined for nearly three months.Despite those pleas, a handful of governors have moved to lift capacity restrictions on businesses, like restaurants and gyms. Some states, like Texas and Mississippi, dropped statewide mask requirements while others, such as Alabama, said they would do so at the beginning of April.”We’re making progress on vaccinations, but cases are rising and the virus is spreading in too many places still,” Biden said.He announced that 90% of adults in the U.S. will be eligible for Covid-19 shots by April 19 and will be able to get them within five miles of their home under the administration’s expanded vaccination plan. More

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    The ship that blocked the Suez Canal may be free, but experts warn the supply chain impact could last months

    In this articleINFOA view shows the container ship Ever Given, one of the world’s largest container ships, after it was partially refloated, in Suez Canal, Egypt March 29, 2021.Suez Canal Authority | ReutersThe Ever Given was pulled free from the Suez Canal on Monday after cutting off traffic in the vital waterway for six days, but experts say the disruptions to global trade will continue to reverberate.”We might celebrate the success of releasing the ship and unblocking the Suez, but that’s not the end of the story here,” said Douglas Kent, executive vice president of strategy and alliances at the Association for Supply Chain Management.”It’s definitely going to continue to backlog ports and other delivery mechanisms as a result, and then of course the chaos that disrupts thereafter,” he added.The ship, one of the largest in the world, became horizontally wedged in the canal last Tuesday. Since then crews worked night and day to free the vessel, which at more than 1,300 feet is almost as long as the Empire State Building is tall.Ultimately, the ship was dislodged around 9 a.m. ET on Monday after more than 10 tugboats arrived on the scene, along with specialized dredging equipment and expert salvage teams all working together to free the 220,000-ton vessel.But while traffic has now resumed in the key waterway, the repercussions after days of halted movement will continue to be felt.Imagery of the Ever Given in the Suez Canal captured by the company’s WorldView-3 satellite on Saturday, March 27, 2021.Maxar TechnologiesAround 12% of global trade flows through the Suez Canal on massive ships like the Ever Given, which can hold 20,000 containers.Lloyd’s List estimates that more than $9 billion worth of goods passes through the 120-mile waterway each day, translating to around $400 million per hour.”The disruption of a week of this size is going to continue to have cascading effects … it’s got to be at least 60 days before things get sorted out and appear to be a bit back to normal,” said Stephen Flynn, professor of political science at Northeastern University. “This level of disruption cascaded after every 24 hours,” he added.The knock-on effects include congestion at ports as well as vessels not being in the right place for their next scheduled journey. Most importantly, it further exacerbates supply chains already reeling from a container shortage amid the Covid-19 buying boom.Flynn, who is also founding director at the Global Resilience Institute, noted that this is one of the challenges of a just-in-time system. Assembly lines will be idled because parts don’t show up when they’re expected, for example.A satellite image shows the Suez Canal blocked by the stranded container ship Ever Given in Egypt March 25, 2021, in this image obtained from Twitter page of Director General of Roscosmos Dmitry Rogozin. Picture taken March 25, 2021.Roscosmos | Reuters”It’s never been stressed this badly before, and it’s going to take a really long time, and they’re just beginning the process of sorting it out … you’ve essentially created this traffic jam that doesn’t allow you just to reset and restart — you have to restack and reset the system and that’s something that’s going to take a lot of choreography,” Flynn added.In the hunt for efficiency and low-cost goods, ships have become larger and larger. Not all ports can handle ships the size of the Ever Given, creating concentrated systems.Ships of this size might sail from China to Rotterdam — the path the Ever Given was on — where its containers might then be loaded onto smaller ships that sail to the rest of Europe or other destinations including the United States.In other words, smaller ports can’t just absorb the scheduling conflicts created by the traffic jam at the Suez Canal.Nearly 19,000 ships passed through the canal during 2020, for an average of 51.5 per day, according to the Suez Canal Authority.By Monday morning, more than 350 vessels total were backed up on both ends of the Suez Canal, as the Ever Given cut off access in both directions. Shipping agent GAC said that traffic was expected to be back to normal in the next three to four days.Ships began heading south from the Great Bitter Lake into the Suez Gulf on Monday afternoon as the Suez Canal Authority sought to get traffic moving again.”However long it takes, the damage has been done, with carriers warning to expect months of supply chain disruption and even tighter capacity as Asia imports surge to Europe and North America,” said Mark Szakonyi, executive editor of The Journal of Commerce by IHS Markit.Some shipping companies, including Hapag-Lloyd, made the decision to reroute vessels around the Cape of Good Hope. This adds at least an additional week of sailing time, while also leading to higher fuel costs.Stranded container ship Ever Given, one of the world’s largest container ships, is seen after it ran aground, in Suez Canal, Egypt March 26, 2021.Mohamed Abd El Ghany | ReutersLooking forward, experts disagree over how much this will ultimately impact U.S. consumers.Jeffrey Bergstrand, professor of finance at the University of Notre Dame’s Mendoza College of Business, anticipates minimal effects.”The incident of the now freed-up tanker Ever Given, that blocked the Suez Canal for approximately a week, will have only a minor and transitory effect on prices of imported goods,” he said. “Since most of the imports blocked over the last week are heading to Europe, U.S. consumers will likely see little effect on prices of U.S. imports, except to the extent that intermediate products of U.S. final goods are made in Europe.”Flynn, on the other hand, said that prices in the U.S. will “almost certainly” rise, as the world’s interconnected supply chain continues to be strained.”This conveyor belt of the maritime transportation system is what’s moved [products] all around, and we took it largely for granted until it suddenly stopped. … There’s going to be a lot of these second-, third-order effects.” More

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    Here's New York City's potential road to economic recovery after the Covid-19 pandemic

    Concern over New York City’s future is brewing as state lawmakers consider drastic measures that could hinder the city’s recovery from the Covid-19 pandemic. New York Governor Andrew Cuomo proposed in January raising taxes on the wealthy and cutting Medicaid and school spending at the state level. Conservatives argue that higher taxes could lead to wealthy taxpayers leaving the city, while progressives say reducing services could have a long-lasting impact on New York City.New York City is highly dependent on its wealthy population. In 2018, the top 1% of earners made up 42.5% of total income tax collected by the city, according to the Independent Budget Office of New York City. That was $5 billion in revenue for the city. “If they leave, there’s a huge fiscal crisis,” said Jared Walczak, vice president of state projects with the Center for State Tax Policy at the Tax Foundation. “How do you pay for all of these services? That affects everyone. The people who stay either have a higher tax burden or will receive fewer government services.” “There’s a real question that policymakers need to address right now. How do you keep these people here? How do you make sure that post pandemic, they want to come back?” Walczak said.But Kim Phillips-Fein, a historian at New York University, said cuts to services could hurt the city in the long run. She noted austerity measures taken during the 1970s fiscal crisis caused increasing inequalities that have haunted the city ever since.Cornell University assistant professor Cristobal Young also pointed out that only a small fraction of wealthy people leave their states for tax purposes.Watch the video above for more on New York’s situation and its potential road to recovery. More

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    Biden says 90% of U.S. adults will be eligible for Covid shots by April 19 with sites within five miles of home

    President Joe Biden said 90% of adults in the U.S. will be eligible for Covid-19 shots by April 19 and will be able to get them within five miles of their home under an expanded vaccination plan he announced Monday.Roughly 40,000 pharmacies will distribute the vaccine, up from 17,000, Biden said, and the U.S. is setting up a dozen more mass vaccination sites by April 19.”For the vast, vast majority of adults, you won’t have to wait until May 1. You’ll be eligible for your shot on April 19,” Biden said during a press conference on the government’s Covid-19 response and vaccination efforts around the country.A few weeks ago, Biden called on states, tribes and territories to make all U.S. adults eligible for vaccination no later than May 1. To date, 31 states have said they will open up eligibility to all adults by April 19, according to the White House.A nurse administers the single-dose Johnson & Johnson Janssen Covid-19 vaccine at a vaccine rollout targetting immigrants and the undocumented organized by the St. John’s Well Child and Family Center and the Los Angeles County Federation of Labour and Immigrant rights groups on March 25, 2021 in Los Angeles, California.Frederic J. Brown | AFP | Getty ImagesBiden is pushing to have 200 million Covid vaccinations administered within his first 100 days in office. As of Friday, 100 million had been given since Biden was inaugurated. That benchmark — which Biden set as his original target — was reached on his 59th day in office.As of last week, the pace of U.S. vaccinations has been averaging about 2.5 million doses per day. If that rate is maintained, Biden’s 200 million target would be hit in about five weeks, or around April 23 — a full week before Biden would mark 100 days in the White House.Even as the pace of vaccinations picks up, Covid-19 cases are on the rise.The U.S. is recording a weekly average of 63,239 new Covid-19 cases per day, a 16% increase compared with a week ago, according to a CNBC analysis of data compiled by Johns Hopkins University. Daily cases are now growing by at least 5% in 30 states and D.C.Earlier Monday, the head of the Centers for Disease Control and Prevention, Dr. Rochelle Walensky, issued a dire warning to reporters. She said she’s worried the nation was facing “impending doom” as daily Covid-19 cases begin to rebound once again, threatening to send more people to the hospital.”I’m going to pause here, I’m going to lose the script, and I’m going to reflect on the recurring feeling I have of impending doom,” Walensky said during a press briefing. “We have so much to look forward to, so much promise and potential of where we are and so much reason for hope, but right now I’m scared.”During Biden’s press conference, the president asked Americans to “mask up,” saying it is their “patriotic duty.””We’re making progress on vaccinations, but cases are rising and the virus is spreading in too many places still,” he said. “That’s why today I’m taking these steps to make our American turn-around story, our vaccination program, move even faster.””The progress we’re making is a significant testament to what we can do when we work together as Americans, we still need everyone to do their part,” he added. “We still are in a war with this deadly virus. We’re bolstering our defenses, but this war is far from won. Together we have so much to be proud of in the past 10 weeks.”When asked by a reporter whether some states should pause their reopening efforts, Biden simply said, “yes.”As part of Biden’s goal to vaccinate more Americans, the White House said he will also announce a new effort to fund community organizations to provide transportation and assistance for the nation’s most at-risk seniors and people with disabilities. That builds on the $10 billion investment to expand access to vaccines in the hardest-hit communities, the White House said. More

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    Dr. Scott Gottlieb: U.S. Covid vaccinations at 'tipping point' of helping turn the tide in pandemic

    In this articleJNJMRNAPFEThe pace of Covid-19 spread and the rate of vaccinations over the next few weeks are crucial factors in whether the U.S. can avoid another surge of coronavirus infections, Dr. Scott Gottlieb said Monday.”If we could just buy ourselves another couple of weeks and not really see a takeoff of infection anywhere in the country, I think we’ll be at the point where we’ll have enough vaccine in the population … that it’s going to be a pretty significant backstop — combined with the warming weather— against really a fourth wave” of infections, Gottlieb said, noting states are significantly widening vaccine eligibility.”I think we’ll achieve that,” added the former Food and Drug Administration commissioner, who now sits on Pfizer’s board of directors. “It’s a little touch and go over the next two weeks because we are seeing some rises in some parts of the country, but it’s probably going to be regionalized. It’s probably just going to be certain states that see their cases go up.”Roughly 28% of the U.S. population has received at least one Covid vaccine dose and 15.5% has been fully vaccinated, as of Sunday, according to data compiled by the Centers for Disease Control and Prevention. Both the Pfizer and Moderna vaccines require two shots for full immunity protection, while Johnson & Johnson’s is a single dose. Those are the only three cleared for emergency use in the U.S.Zoom In IconArrows pointing outwards”When Israel hit about 25% of their population vaccinated, that’s when they started to see the [case] declines that were ascribed to the vaccination. We’re right about at that tipping point,” Gottlieb said in an interview on CNBC’s “Squawk Box.”The seven-day moving average of new infections is increasing in 30 states and Washington, D.C., according to a CNBC analysis of Johns Hopkins University data. Gottlieb pointed to Michigan, as well as the tristate area of New York, New Jersey and Connecticut, as regions where “we see problems.”Overall, the country’s latest weekly average of daily new Covid cases is over 63,000, up 16% compared with the prior week, according to CNBC’s analysis. That remains well below the nation’s peak in early January of roughly 250,000.For the seven-day period ended Friday, hospital admissions of Covid patients rose 4% from the prior week but were down more than 71% from early January, according to the CDC.The U.S. averaged 970 Covid deaths per day over the past week, a decrease of 3% from the prior, CNBC’s analysis shows.Last week, White House chief medical advisor Dr. Anthony Fauci said at a news briefing that America is “at the corner,” rather than turning the corner, in the fight against Covid.— CNBC’s Nate Rattner contributed to this report.Dr. Scott Gottlieb is a CNBC contributor and a member of the boards of Pfizer, genetic testing start-up Tempus, health-care tech company Aetion and biotech company Illumina. He also serves as co-chair of Norwegian Cruise Line Holdings′ and Royal Caribbean’s “Healthy Sail Panel.Correction: The country’s latest weekly average of daily new Covid cases is over 63,000, up 16% compared with the prior week, according to CNBC’s analysis. An earlier version mischaracterized the figures. More

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    Sen. Toomey accuses the Fed of overstepping on climate change and other social issues

    U.S. Senator Pat Toomey (R-PA) questions Treasury Secretary Steven Mnuchin during a hearing on “Examination of Loans to Businesses Critical to Maintaining National Security” before the Congressional Oversight Commission at Dirksen Senate Office Building, in Washington, December 10, 2020.Sarah Silbiger | Pool | ReutersSen. Patrick Toomey is taking aim at the Federal Reserve, expressing concern in a letter Monday about the central bank’s foray into social issues such as climate change, race and health insurance.Specifically, the Pennsylvania Republican cited research from the Fed’s San Francisco district about a host of issues that he said exceed the central bank’s traditional mandates on employment, inflation and bank supervision.Toomey warned Fed officials that its independence from political influence could come into question as it pursues issues that government agencies normally handle.”The Federal Reserve may pursue mission creep or welcome itself to political capture,” Toomey wrote in a letter to San Francisco Fed President Mary Daly. “But such activities are inconsistent with its statutory responsibilities; only Congress has the authority to reform the Federal Reserve or modify its mission.”He added that while the research “may be meritorious, the Federal Reserve is devoting significant federal resources to efforts that are supposed to be independent and nonpartisan.”Among the San Francisco Fed essay topics Toomey cited were health insurance and essential service workers in New England. Other areas addressed included race, occupation and Covid-19 infection rates, as well as plans for a virtual seminar on climate economics.The senator directed the San Francisco Fed to answer a series of inquiries by April 12.”We have received and are reviewing Sen. Toomey’s letter, and we look forward to discussing the contents with Sen. Toomey’s office,” a San Francisco Fed spokesman said.Among the issues in which the Fed has inserted itself, climate change is perhaps the most nettlesome.Fed Governor Lael Brainard has been the biggest champion of pressing banks to plan for climate-related events, saying in a recent speech, “It is increasingly clear that climate change could have important implications for the Federal Reserve in carrying out its responsibilities assigned by the Congress.”Last Tuesday, Brainard announced the formation of two Fed committees that will come up with strategies on dealing with climate change and how it affects financial institutions.Chairman Jerome Powell has faced questioning on Capitol Hill about the issue, with Republican legislators in particular expressing concern about why the central bank has inserted itself into the climate issue. In an NPR interview last week, he conceded that climate is “not mainly an issue for the Fed, but we do have a role to play.””We’ve got a pretty narrow but important set of responsibilities, and the ones that are relevant here are really regulating and supervising banks and some other financial institutions to assure that they understand the risks that they run and that they have appropriate plans and tools to manage those risks. And that includes risks from climate change,” Powell said. “We see it as something that we’re taking on as part of our traditional regular statutory mandate.”Toomey, though, said the Fed has veered too far into “politically-charged research,” specifically citing both climate change and racial justice. More

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    How Archegos’ $20 billion move to flee certain names led to banks’ share prices tumbling

    In this articleVIACPDISCATMEVIPS9888-HKVIAC8604.T-JPCSG.N-CHTraders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., January 31, 2018.Brendan McDermid | ReutersThe woes that arose from Archegos Capital Management at the end of last week bled into Monday as a slew of big banks saw their share prices decline.Here’s how the $20 billion blowup unfolded.U.S. media stocks ViacomCBS and Discovery experienced severe selling pressure on Friday, with each losing more than 27%.A few Chinese internet ADRs including Baidu, Tencent and Vipshop also suffered sell-offs of a similar magnitude last week.ADRs are American depositary receipts, essentially a certificate that represents a share of a foreign stock and is traded on American stock exchanges.The culprit for the massive selling was a forced liquidation of positions held by the multibillion-dollar family office Archegos, CNBC reported.Zoom In IconArrows pointing outwardsArchegos, founded by former Tiger Management equity analyst Bill Hwang, had built massive positions in these stocks through swaps, a type of derivative that investors trade over the counter or among themselves without having to disclose the holdings publicly.These swaps usually involve higher-than-usual leverage.These large, leveraged bets came under pressure after ViacomCBS’ $3 billion stock offering through Morgan Stanley and JPMorgan earlier in the week fell apart, which triggered broad selling in the name.The initial weakness in ViacomCBS triggered a chain of events where the prime brokers rushed to exit the positions on Archegos’ behalf and resulted in a massive margin call. The hedge fund was forced to inject more cash to cover the losses, amassing a forced liquidation of more than $20 billion.The sell-off in these names continued on Monday with ViacomCBS down more than 8%. Discovery was off by more than 3%.‘Significant losses’ A slew of big banks involved are warning of the fallout from the unwind of certain trades but are not specifically mentioning Archegos.Nomura, headquartered in Tokyo, issued a trading update Monday citing a “significant loss” at one of its U.S. subsidiaries resulting from transactions with an unnamed U.S. client. Japan’s largest investment bank said it was evaluating the potential extent of the loss, estimated at $2 billion. Its shares fell nearly 14% on Monday.Nomura did not immediately return a phone call from CNBC.Credit Suisse said it and a number of other banks it didn’t mention were also affected and had begun exiting positions with the unnamed firm. The Zurich-based lender’s shares were down more than 15% following the announcement.”While at this time it is premature to quantify the exact size of the loss resulting from this exit, it could be highly significant and material to our first quarter results, notwithstanding the positive trends announced in our trading statement earlier this month,” Credit Suisse said.It added that it would provide a further update on the matter “in due course.”Goldman Sachs, Morgan Stanley, and Deutsche Bank also facilitated Archegos’ liquidation of its holdings in many of the Chinese internet names through unregistered trades, CNBC reported.Deutsche Bank said Monday that it significantly de-risked its exposure associated with Archegos without incurring any losses.”We are managing down the immaterial remaining client positions, on which we do not expect to incur any loss,” the German lender said in a statement Monday.Morgan Stanley also avoided significant losses from the Archegos trades, sources told CNBC’s Leslie Picker.Goldman didn’t immediately reply to CNBC’s request for comments.The Securities and Exchange Commission has been closely watching the impact from Archegos’ margin call default. “We have been monitoring the situation and communicating with market participants since last week,” an SEC spokesperson said Monday— CNBC’s Elliott Smith, Bob Pisani and Scott Wapner contributed reporting. More