The results of Tuesday’s trading across the Americas.
🗽 On Wall Street:
U.S. stock markets have one eye on the Federal Reserve’s two-day meeting that kicked off today, which will preview the central bank’s next steps to control inflation.
The markets have seen weeks of volatility as investors wait for the U.S. central bank to tighten monetary policy and begin raising interest rates in March.
Although all three major stock market indicators saw gains at times, after buyers took advantage of falling prices, they closed with losses at the end of the day. The S&P 500 (SPX) lost 1.22%, the Dow Jones Industrial Average (INDU) dipped 0.19% and the Nasdaq Composite (CCMPDL) slipped 2.28%.
The International Monetary Fund lowered its forecast for global growth for this year, based on weaker showings by the U.S. and Chinese economies.
🔑 The Day’s Key Figures:
Oil prices rose by more than 2% as long-term demand remains solid, despite the ups and downs that the financial markets have shown in the first month of 2022.
Brent registered a rise of 2.16% to $88.12 per barrel, while WTI rose by 2.45% to $85.35, returning to last week’s trend, when they hit a seven-year high, with consumption remaining strong despite the fears generated by Omicron, which expanded faster but had less impact on the economy than previous variants.
The crisis in Ukraine could boost costs per barrel, to the point that disruption of oil flows from Russia could easily send prices to $120, according to JPMorgan Chase (JPM).
🥇 The Leader:
Argentina’s stock market was the day’s top performer in Latin America, after investors made opportunity purchases following the 3.13% drop recorded by the Merval (MERVAL) in Monday’s session, but which closed on Tuesday with a 5.16% hike.
Grupo Financiero Galicia (GGAL), YPF (YPFD) and Pampa Energía (PAMP) shares were among the best performers on Tuesday.
However, the market continues to be attentive to the negotiations with the International Monetary Fund (IMF) and the expectation of a payment due this month. During the morning, Gita Gopinath, deputy managing director of the IMF, said that the organization is adopting “a flexible and pragmatic approach” in the negotiations with the Argentine government.
Her statements were made during the presentation of the IMF’s growth forecasts, in which it raised its projection for the Argentine economy this year.
And the good news did not end here, as Argentina’s statistics bureau Indec reported that the monthly economic activity indicator for November 2021 saw an increase of 1.7% compared to October, while in the inter-annual comparison it recorded an increase of 9.3%.
The Brazilian stock market, the largest in Latin America by market capitalization, also broke away from the international trend and posted gains of 2.10%. The Ibovespa (IBOV) was driven by stocks related to raw materials, such as iron ore, and oil, especially Petrobras (PETR4).
📉 A Bad Day:
Latin America’s major stock markets closed with gains, although Peru’s (SPBLPGPT) was the weakest.
The shares of Trevali Mining (TV), Nexa Resources (NEXAPEC1) and Unión de Cervecerías Peruanas (BACKUSI1) were among the worst performers.
Copper, one of the main sources of income for the Peruvian economy, lost 2.14% on the London Metal Exchange and ended the day at $9,728. Risk aversion, produced by the volatility in the Fed’s change of stance, affected the price of the metal.
🍝 For the Dinner Table Discussion:
The Organization for Economic Cooperation and Development (OECD) announced that it has initiated the process for six economies to join the so-called best practices club, including Argentina, Brazil and Peru. The OECD Council will also include applications from Bulgaria, Croatia and Romania.
Once the countries agree to begin this stage, the terms, conditions and process for joining the organization will be established. This will include an evaluation by more than 20 technical committees that will analyze whether they conform to OECD parameters.
“Candidate countries will be able to use the accession process to promote further reforms for the benefit of their peoples, while strengthening the OECD as a like-minded community committed to a rules-based international order,” said OECD Secretary-General Mathias Cormann.
If the three Latin American countries’ applications are accepted, they would join Chile, Colombia, Mexico and Costa Rica as members of the OECD.