FT News Briefing European stocks are getting their moment in the sun
May 28, 2021
The collapse of Archegos Capital has sent shockwaves through the SPAC market, prompting a revaluation of hedge fund leverage. Meanwhile, activist investors have successfully challenged ExxonMobil, calling for reduced oil production. In Europe, investor enthusiasm is surging for equity markets like the MSCI EMU Index, fueled by strengthening economic conditions and vaccine progress. In contrast, the US stock market faces stagnation and inflation worries, shifting focus from tech stocks to value sectors.
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Archegos Impact on SPACs
- The collapse of Archegos Capital Management has impacted the SPAC market.
- Banks are reducing leverage to hedge funds invested in SPACs, affecting their returns.
SPAC Trading Dynamics
- Most SPACs initially trade at $10, and theoretically, this value is risk-free.
- However, decreased investor interest can cause SPACs to trade below $10, creating an awkward dynamic.
ExxonMobil's Future
- ExxonMobil needs to adapt to a world demanding less oil by allocating capital intelligently.
- This likely means reducing oil and gas production to remain competitive.