Powell’s Promises Power U.S. Markets; Chile Heads LatAm Gains

Federal Reserve president Jerome Powell told the Senate the central bank will do all it can to contain inflation

Markets Wrap
January 11, 2022 | 06:06 PM

Bloomberg Línea — Federal Reserve president Jerome Powell’s appearance before the Senate on Tuesday gave the markets a breather following a mixed performance so far this year, amid uncertainty surrounding the Omicron variant of Covid-19 and the impact that an interest rate rise could have.

The S&P 500 (SPX), which had closed with losses on five consecutive days, closed Tuesday with a 0.92% gain, while the Dow Jones Industrial (INDU) advanced 0.51%, and the Nasdaq Composite (CCMPDL) gained 1.41%, bolstered by a positive performance by big tech shares.

Powell told the Senate banking committee Tuesday that the Fed will do all within its power to contain inflation.


“If we see inflation persisting at high levels longer than expected, if we have to raise interest rates more over time, then we will,” Powell said.

According to minutes of the Fed’s December meeting, there will be three rate rises this year, the first of which could be as early as March.

“After Powell’s testimony, some investors feel they received a clear sign to buy. The Fed’s window of adjustment is complex given that inflation could reach its maximum level in the summer, and it could be that they don’t want to be too political and be too aggressive so close to the midterm elections,” Edward Moya, a senior market analyst at Oanda, said in an email.

Oil rose more than 3.5% thanks to Powell’s Senate testimony, and due to the prospects of global demand remaining optimistic as the majority of the major economies get close to controlling Omicron, Moya added.


Bitcoin (XBT) halted its downward trend and rose 2.2% to $42,828,68 at 16:19 hours New York time.

Latin America

Chile’s stock market (IPSA) had the best performance in the region, closing with a 2.25% hike, mirroring the recovery in Wall Street, with raw materials, non-basic consumer products and industries leading the gains.

The region’s top three was closed out by Colombia (COLCAP), with a 2.03% gain, and Peru (SPBLPGPT), which closed the day up 1.92%. In Colombia, Grupo Gilinski finalized its takeover bid for Grupo Sura (GRUPOSUR). During the bid’s 11-day span the family acquired 25.42% of the company.

Brazil’s Ibovespa (IBOV) gained 1.80%, with shares of Brazilian companies de Pet Center (PETZ3), Meliuz (CASH3) and Natura (NTCO3) putting in the best performance of the day.

In Mexico, Citigroup announced its plans to abandon the retail banking sector, where it has its largest network of branches in the world, as part of the drive by its executive director Jane Fraser to review the company’s strategy.

This is how the region’s markets and currencies behaved on Tuesday, January 11: