Daily Agenda: Pessimism Prevails in Low Volume Markets

SunEdison default concerns rise; Citic books commodity losses; Sequoia’s Goldfarb steps down.

A rebound for the dollar against major currencies and a corresponding sell-off in global commodity and equity markets suggest that investors remain focused on central bank policy. Pessimistic sentiment, combined with low trading volume, has driven risk-asset prices lower in recent sessions during a week that will be truncated by the Good Friday holiday in many countries.

Citic earnings miss estimates on lower basic materials prices. Chinese conglomerate Citic reported today full-year financial results that fell short of consensus analyst estimates with a 5 percent gain in earnings on revenues that were lower than the prior year. Losses in commodity-centric business units were a primary driver of the disappointing returns. The company recently announced a sale of residential real estate assets to Hong Kong’s Overseas Land & Investment.

SunEdison nears default. Troubled Missouri–based renewable energy company SunEdison will face a technical default on more than $1 billion of nearly $12 billion in total debt if it can’t file consolidated financial results by the end of March. Some industry analysts predict that the company, which has missed two announced deadlines for filing earnings year-to-date, may seek bankruptcy protection. The company’s share price has fallen from more than $30 per share last June to a closing value of $1.27 in trading yesterday.

Famed manager departs Sequoia Fund over Valeant losses. Yesterday asset manager Ruane, Cunniff & Goldfarb announced that Robert Goldfarb would step down from his role as portfolio manager for the Sequoia Fund, a role he has held for decades. The fund’s concentrated position in troubled drug maker Valeant Pharmaceuticals International resulted in significant losses in recent months, marring a long-term track record of outperformance.

Thiam reveals losses at Credit Suisse. Recently installed Credit Suisse Group CEO Tidjane Thiam yesterday announced significant setbacks for the bank’s trading units after losses in illiquid debt instruments of which he acknowledged he was unaware. The announcement, which raised concern among investors over risk control oversight at the Swiss banking giant, was coupled with plans to make further cutbacks in trading units.

U.S. initial unemployment claims decline again. Department of Labor data released this morning indicated that the number of new claimants for unemployment benefits in the week that ended on March 19 declined at a faster pace than most analysts anticipated with an increase of only 6,000 applicants versus the prior week for a total of 265,000. Consensus forecasts were for approximately 270,000. Critically, the labor Department revised last week’s reading downward by 6,000 freshly unemployed workers.