Weekly Commentary: At The Brink

2026-03-14 04:25:37 ET

Crisis dynamics are reaching full force. WTI crude prices approached $120 in Sunday's wild overnight session. Nasdaq futures were down as much as 2.6%. In Monday trading, Japan's Nikkei 225 index sank as much as 7.7%, following the previous week's 5.5% drop. South Korea's Kospi was down almost 9%, adding to last week's 10.6% slump. Global bond markets were under heavy selling pressure. UK gilt yields surged 17 bps Monday to almost 4.80% (14-month high), as two-year yields surged as much as 29 bps to 4.17%. Italian yields were up 17 bps at the day's high to 3.77% (11-month high).

In early Monday trading, 10-year Treasury yields were seven bps higher to 4.21%, though the more alarming moves were in the swaps market. Indicative of mounting liquidity stress, the 30-year Treasury swap spread was down almost three points to a six-month low of 82 bps - continuing the steepest decline since April. High-yield CDS jumped to the high since May. Bank CDS also rose to 10-month highs. "Biggest High Yield ETFs Drop to Fresh Nine-Month Lows." Precious metals prices were also under pressure (i.e., silver down 5.5%). In short, myriad levered strategies were under intense pressure, with no place to hide.

March 10 - Bloomberg (Nishant Kumar and Liza Tetley): "Some of the world's biggest hedge funds known for their steady returns suffered hundreds of millions of dollars in losses last week after the war against Iran triggered wild market moves and hit portfolios across the industry. Coatue Management's hedge fund lost 3.8% last week and was down 2.4% this year through March 6… Citadel's main Wellington hedge fund lost 2% last week, with its macro business suffering declines… ExodusPoint Capital Management's multistrategy hedge fund last week gave away all the gains it had notched up for the year… Hedge fund giant Millennium Management, which manages $86.7 billion, lost about $1.5 billion in the week through March 6… At Point72 Asset Management, the 1.1% decline during the week cut its advance this year through March 6 to 3.4%... Balyasny managed $32 billion, while Point72 oversaw $45.7 billion… Marshall Wace's flagship Eureka hedge fund was down 3.7% last week…"...

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