Apple Results Boost U.S. Markets; Argentina’s Merval Climbs Following IMF Deal

Oil scores its sixth weekly rise as prices stay close to seven-year highs

A visitor takes a photograph of an electronic board displaying stock activity at the Brasil Bolsa Balcao (B3) stock exchange in São Paulo, Brazil, on Monday, Nov. 8, 2021.
January 28, 2022 | 06:35 PM

A roundup of the region’s stock market results on Friday

🗽 On Wall Street:

Volatility continued on Wall Street on Friday, to the point that the S&P 500 (SPX) posted its biggest rally since June 2020, closing with a rise of 2.43%. The Nasdaq Composite (CCMPDL) followed suit with a gain of 3.13%, while the Dow Jones Industrials (INDU) rose 1.65%.

Despite the negative effect on the markets of the Federal Reserve’s impending interest rate rise, the rise of Apple‘s (AAPL) shares after the company’s results exceeded market expectations, boosted the day’s good performance.

The company’s sales rose 11% to $123.9 billion during the first fiscal quarter, which ended December 25, Apple said Thursday, with analysts having predicted an average of $119 billion, and the company’s profits also exceeded expectations.

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“Investors are hoping that market fundamentals, such as earnings results, can divert attention away from fears of changes in central bank policy and inflation. However, it may take a lot of good news to change the tone on Wall Street,” Lindsey Bell, chief markets and money strategist at Ally, told Bloomberg.

🔑 The Day’s Key Data:

Benchmark Brent crude oil continues its upward trend to above $90, adding to expectations that it will reach $100 per barrel, after recording its sixth consecutive weekly gain with prices remaining near a seven-year high.

“Demand has been strong, supply has been struggling a little bit to keep up and that’s reflected in the market,” Chevron Corp. chief executive Mike Wirth said on Bloomberg TV.

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Wirth added that geopolitical events are impacting the commodity market more than in the past and that oil at $100 “certainly is within the realm of what we could see in the next few months.”

🥇 The Leader:

Argentina’s stock exchange (MERVAL) put in the best performance on Friday in Latin America, after the government announced an agreement in principle with the International Monetary Fund. President Alberto Fernández announced that an understanding had been reached with the lender for the country’s debt, which exceeds $40 billion, saying that it stipulates “sustaining the economic recovery”.

Economy Minister Martín Guzmán provided some details of the extended facilities agreement negotiated with the IMF, including some figures for the next three years: primary fiscal deficit of 2.5% of GDP for 2022; 1.9% for 2023 and 0.9% for 2024. The IMF subsequently issued a statement in which it confirmed that the lender and Argentina “have reached an understanding on key policies”, but added that “discussions on a program supported” by the Fund are still ongoing.

Read More: What’s Next for Argentina after the Agreement with the IMF

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📉 A Bad Day:

Brazil’s Ibovespa (IBOVESPA), Latin America’s largest stock exchange by market capitalization, lost the most in the last session of this week, with energy sector shares, which includes those of state oil company Petrobras (PETR4), suffering the sharpest declines.

The oil company’s shares, which rose in the morning, began to fall in the afternoon after former president Luiz Inácio Lula da Silva said during an interview that there is no reason for fuel prices in Brazil to follow the trend of the international market.

Lula criticized the company’s dividend payment policy and insisted once again that Petrobras should build refineries so that the country stops exporting crude oil and importing oil derivatives. According to Lula, more than 400 companies now import gasoline and other derivatives.

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🍝 For the Dinner Table Debate:

The Biden administration held talks with the largest U.S. banks about possible sanctions against Russia as part of its efforts to ensure that such actions do not disrupt the global financial system.

Members of the National Security Council and other senior administration officials spoke this week with executives from banks including Citigroup Inc (C), Bank of America Corp (BAC), JPMorgan Chase & Co. (JPM) and Goldman Sachs Group Inc. (GS) as they assess how to proceed, according to people familiar with the matter.

The U.S. and the European Union are outlining a package of measures that would include targeting Moscow’s ability to convert currencies.