Bloomberg Línea — The volatility of U.S. markets persists in a year that will be marked by a more aggressive monetary policy by the Federal Reserve as stimuli introduced to control the economic crisis are phased out and the central bank seeks to put the brakes on inflation.
The country’s stock markets have so far failed to record more than three consecutive days of gains and closed with losses again Thursday, once again dragged down by the performance of technology companies’ shares. The S&P 500 (SPX) closed with a fall of 1.42%, while the Dow Jones Industrial (INDU) dropped 0.49%.
The Nasdaq Composite (CCMPDL) followed the same trend with a 2.51% slump, while the Nasdaq 100 (NDX), which lists tech company shares, dropped 2.60% to its lowest level since October.
“Tech is the classic example of an area where stocks have really benefited from the decline in rates,” said Kara Murphy, chief investment officer of Kestra Investment Management. “As expectations rise for rates going forward, then it makes sense that would be the area that would get hurt more.”
On Wednesday, Fed Governor Lael Brainard had said the central bank could raise interest rates in March, in line with market expectations, to ensure prices remain under control. Last month’s meeting of the central bank hinted that its members expect three increases in benchmark rates this year. However, Chicago Fed President Charles Evans added that there could be as many as four hikes if inflation data does not improve fast enough.
Latin America
In Latin America, the Colombian stock exchange (COLCAP) was the best performer in the region, rising 1.10% at closing. Shares linked to Grupo Empresarial Antioqueño (GEA) were the biggest winners in the session, one day after the end of the takeover bids launched by Grupo Nutresa and Grupo Sura.
The result reshuffles the business conglomerate for the first time in decades, following the Gilinski Group’s arrival onto the board of directors.
The second best performer in the region was the Peruvian stock market (SPBLPGPT), which rose 0.58%, marking three consecutive sessions of gains, as the climate of political risk in the country that dogged the first days of Pedro Castillo’s presidency diminishes.
The price of copper surpassed $10,000 on the London Metal Exchange amid fears about supply in the face of dwindling inventories.
Brazil’s Ibovespa (IBOV) slipped 0.15% on a day of ups and downs, in line with international volatility. Investors were attentive to news about the increase in Covid-19 cases in Brazil caused by the Christmas season. The São Paulo state government’s announcement that it will keep trade and service activities open helped ease fears of another wave of restrictions, however.
