A roundup of the region’s stock market results on Thursday.
🗽 On Wall Street:
U.S. markets saw another day of losses on Thursday ahead of an interest rate raise by the Federal Reserve. The S&P 500 (SPX) dropped almost 2% while the Nasdaq 100 (NDX) dropped to its lowest level since June.
Tesla Inc. (TSLA) shares dropped 12% after the company delayed the presentation of its new electric car models, due to supply chain issues, while shares of Intel Corp. (INTC) brought down other chip manufacturers with a disappointing revenues forecast, and Apple Inc. (AAPL) shares dropped for the eighth consecutive session prior to its results report.
Gold dropped as investors continue to evaluate their assets in anticipation of the Fed’s more restrictive monetary policy, while the U.S. dollar rose along with two-year Treasury bonds.
“Market volatility is not going away anytime soon as the ‘buy the dip’ crowd has a new motto, ‘sell the rally’. Today’s stock market rally did not last as corporate America reminded us that supply chain troubles persist, and profit forecasts are not providing any reasons to be optimistic. Many traders are still processing what happened yesterday with the Fed,” Edward Moya, a senior market analyst for the Americas at OANDA, said.
🔑 The Day’s Key Data:
Oil slipped from a new seven-year high as stocks faltered and the strength of the dollar weighed on the commodity, and although crude has been rallying in the first few weeks of the year due to the recovery in energy consumption following the impact of the pandemic, the market is not immune to the rebounds of most major assets on Thursday.
“WTI crude oil prices reversed earlier gains as the dollar rallied, following better-than-expected economic data that supported the idea that the economy can withstand rapid Fed rate hikes,” Moya said.
Meanwhile, as oil balances remain tight as the markets watch for a possible escalation in the Ukraine-Russia conflict that could result in a disruption of energy supplies.
🥇 The Leader:
Brazil’s Ibovespa (IBOV), the largest stock market in Latin America, saw the region’s biggest gains on Thursday.
Magazine Luiza (MGLU3), Banco Inter (BIDI11) and Via (VIIA3) shares had the best performance, with the Ibovespa closing with a 1.19% gain.
📉 A Bad Day:
Mexico’s stock exchange (IS1) recorded the worst perromance in the region, with the S&P/BMV IPC dropping 1.12% as the shares of Kimberly-Clark (KIMBERA), América Móvil (AMXL) and Grupo Bimbo (BIMBOA) suffered the sharpest declines.
🍝 For the Dinner Table Discussion:
Brazil, Mexico, the United States, Great Britain and other countries with governments considered “populist” mismanaged the Covid-19 pandemic in 2020 and caused unnecessary deaths with relatively “lenient” policies, according to an academic research paper by the Kiel Institute for the World Economy.
Michael Bayerlein, one of the paper’s authors, said that on average excess mortality, i.e. the number of deaths beyond what could be expected without the pandemic, more than doubled in countries governed by populist rulers.
The reason cited was that citizen mobility in the midst of the highest peak of the pandemic was greater in populist countries because those governments were less likely to implement “unpopular policies” to mitigate the spread of the virus.
