Dow Jones Decline Continues; Brazil’s Ibovespa Heads LatAm Gains

Oil prices remain at seven-year highs with Brent approaching $89 per barrel

Markets Wrap
January 19, 2022 | 06:41 PM

Bloomberg Línea — U.S. stock markets remained in the red Wednesday as speculation grows among investors for a possible increase in interest rates by the Federal Reserve in March and as they evaluate the beginning of the corporate results season.

The S&P 500 (SPX) fell 0.97% and the Nasdaq Composite (CCMPDL) dropped 1.15%, completing a 10% fall from the highs it reached in November. The Dow Jones Industrials (INDU) accumulated four consecutive sessions of declines and closed the day with a loss of 0.96%.

“Anxiety and uncertainty continue to dominate after a disappointing start to earnings season. Inflation and interest rate concerns are going nowhere soon and with traders now increasingly considering the possibility of hikes larger than 25 basis points, the possibility of more pain in stock markets is very real,” Craig Erlam, senior analyst for U.K. and EMEA at Oanda, said in an emailed note.

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Oil continues at a high, with the benchmark Brent trading above $88 per barrel, a price not seen for seven years, after the U.S. International Energy Agency (IEA) said the market looks tighter than previously thought, with demand showing resilience to the Omicron variant of Covid-19.

“The oil market seems in a transition phase where output growth exceeds demand growth, as the post pandemic recovery has largely run its course.” Norbert Rücker, Head of Economics and Next Generation Research at Julius Baer, said in a note.

Latin America

In Latin America, Brazil’s Ibovespa (IBOV) gained 1.26% and was the best performing major stock market index, taking advantage of the more positive climate that took hold of global markets during the afternoon. Technology and consumer discretionary stocks were the best performers of the day.

In particular, the shares of Locaweb (LWSA3), Americanas (LAME4) and Marisa (AMAR3) performed the best. In the case of the latter two, the market has been awaiting the outcome of negotiations for the acquisition of Marisa since last year. In August, the Americanas group said it had begun talks to acquire the company, which specializes in the retail of women’s clothing.

This is how the region’s markets and currencies closed on Wednesday, January 19: