A roundup of Friday’s stock market results from across the region
🗽 On Wall Street:
U.S. markers took another battering on Friday, having been dragged down on Thursday by inflation data showing the cost of living has suffered its highest rise in 40 years, with the main indexes deepening their losses Friday after a warning by the U.S. government that a Russian invasion of Ukraine could be imminent.
The conflict “could start during the Olympics, despite much speculation that it could only happen after” the Winter Games are over, U.S. National Security Advisor Jake Sullivan told reporters at the White House on Friday. “What we can say is that there is a credible prospect of a Russian military action taking place even before the end of the Olympics.”
The S&P 500 (SPX) fell 1.90%, while the Dow Jones Industrials (INDU) slid 1.43% and the Nasdaq Composite (CCMPDL) lost 2.78%.
A Russian attack would likely begin with aerial bombardments and missile strikes that would cause numerous civilian casualties, said Sullivan, who encouraged Americans in Ukraine to leave the country as soon as possible.
🔑 Friday’s Key Developments:
The warning about a possible conflict between Russia and Ukraine benefited oil prices however, at a time when supply has not been able to keep up with the growing demand as economies reactivate after the pandemic.
Brent benchmark crude touched $95 for the first time since 2014 after rising almost 4%, while WTI hit $94. A Russian invasion of Ukraine would put oil supply at risk and also opens the door to new U.S. sanctions on Russian industry.
The uncertainty comes at a time when OPEC admitted that the rebound in oil consumption could exceed its forecasts this year as economic activity improves and travel picks up pace.
“Oil prices are rising once again as the IEA raised demand forecasts for this year and confirmed that OPEC+ missed its production targets again in January and by an even larger margin of 900,000 barrels,” said Craig Erlam, senior market analyst, UK and EMEA at Oanda.
There are obstacles to an uptick however, as there is the possibility that a nuclear pact with Iran will be signed as negotiations with the U.S. and Europe progress, and that could return the flow of oil from that country to international markets.
🥇 The Leader:
Latin America’s markets did not mirror the losses in the U.S. and the main indexes of Mexico and Colombia fought for the best performance of the day in the last minutes of the session.
In the end, the Mexican stock market was the leader and ended with a gain of 1.20%. The communication services, materials and consumer staples sectors performed positively.
Grupo Financiero Inbursa (GFINBURO), Grupo Carso (GCARSOA1) and Grupo México (GMEXICOB) shares recorded the best performance of the day.
On the other hand, after three down sessions, the Colombian stock market recovered on the last day of the week and closed with the second best performance among its Latin American peers.
The Colcap (COLCAP), its main indicator, closed up 1.19%. Ecopetrol (ECOPETL) shares were among the best performers, boosted by the rebound in oil prices following concerns that the conflict between Ukraine and Russia is imminent.
Shares linked to the hydrocarbons sector such as Canacol Energy (CNEC), Promigas (PROMIG:CB) and Terpel (TERPEL) followed the trend shown by the state-owned oil company.
Brazil’s Ibovespa (IBOV), the leading index of the largest stock exchange by market capitalization in Latin America, struggled to find a direction in the last minutes of the session and, although it registered losses during the day, in the end closed the day with a slight rise.
Prior to the news in the United States, the index was already rising amid the solid performance of banking stocks, which are strongly represented on the Ibovespa.
The session was marked by the appreciation of ItaúUnibanco (ITUB4) shares, with an increase of around 6%, after the bank reported results above the market consensus.
🍝 For the Dinner Table Debate:
If you like sports, you’re surely saving this Sunday for the Super Bowl LVI, in which the Los Angeles Rams and the Cincinnati Bengals will face off. The sporting spectacle is expected to move millions of dollars.
The Super Bowl host committee hired the firm Micronomics Economic Research and Consulting to study the economic benefits of the final, and which calculated that it could move up to $447 million. The report, which claims to have made “conservative estimates,” found that between 2,200 and 4,700 new jobs will be generated.
Although academic studies criticize these estimates, and claim the figures will be much lower, Los Angeles County, where the game will be held, expects the final to be a turning point for the recovery of the economy after the impact of Covid-19.
The Super Bowl will also move money through the 70 30-second advertising spots at $7 million each sold by NBC, bets estimated at $7.61 billion and avocado shipments, which benefit the Latin American industry.