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U.S. Markets End Month With Losses; Mexico Leads LatAm Gains

Oil prices rise as the U.S. and European Union intensify sanctions against Russia

Mexico's stock exchange (BMV). Photographer: Susana Gonzalez/Bloomberg
February 28, 2022 | 08:10 pm

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

🗽 On Wall Street:

Although they recovered part of their losses incurred in recent days, U.S. stock markets started the week with a downward slide, except for the Nasdaq Composite (CCMPDL), which gained 0.41%, on the fifth day of Russia’s invasion of Ukraine.

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Ukraine and Russia started negotiations on Monday in a bid to try to bring an end to the conflict.

The head of the Russian delegation at the talks, Vladimir Medinsky, said the two sides have agreed to continue negotiations to try to stop the war, Interfax news service reported.

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The S&P 500 slipped 0.24% and the Dow Jones Industrials fell 0.49%. The three main indexes closed February with losses of more than 3%, continuing the trend seen in January.

Vladimir Putin’s government reacted on Monday to the sanctions issued by the West over the weekend, which caused the ruble to plummet and the suspension of stock exchange operations. Putin banned all Russian residents from transferring foreign currency abroad, including for foreign debt, in a package of measures to try to counter the decisions of the United States and the European Union.

🔑 Key Events:

Oil prices returned to their upward trend after the United States and the European Union intensified their sanctions against Russia, with a package of measures that included the blocking of certain Russian banks from the Swift system and the prohibition of transactions with the Central Bank of Russia.

The Brent benchmark once again surpassed the $100 barrier, while the price of WTI was above $95. Although both benchmarks rose by more than 3%, the rise lost momentum during the day.

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The United States and its allies are discussing a coordinated release of around 60 million barrels of oil, in order to halt the increase in prices.

Goldman Sachs (GS) raised its one-month forecast for Brent to $115 per barrel from $95, with significant upside potential if there is a further escalation of tensions or a more prolonged disruption.

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Bitcoin (XBT) also put the brake on its downward trend and broke its correlation with the S&P 500, trading above $40,000.

Read More: A Stock Trader’s Guide to a World Where Oil Costs $100 or More

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🏅 The Leader:

In Latin America, the Mexican stock market closed with the highest gains, influenced by the momentum of U.S. stocks in the last hours of the session, and the S&P BMV/IPC (MEXBOL) ended the day with a 1.61% climb.

The financial, materials and consumer goods sectors led the day. Grupo Financiero Banorte (GFNORTEO), Grupo Financiero Inbursa (GFINBUR) and Grupo México (GMEXICOB) shares performed the best during the day.

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Chile’s main index Ipsa (IPSA) ended the day up 1.54% and was the second best performer in the region. The information technology, materials and real estate sectors performed well during the day.

Shares such as those of Sociedad Química y Minera (SQM/B), Sonda (SONDA) and Cencosud (CENCOSHO) performed best. The increase in the price of copper, which closed above $9,873, helped expectations for the Chilean economy.

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Holidays in Brazil and Argentina meant that the Ibovespa (IBOV) and Merval (MERVAL) respectively were closed Monday.

📉 A Bad Day:

The Peruvian stock market had the worst performance among its Latin American peers, amid tensions due to the war in Ukraine and the political uncertainty generated by a possible bid to oust President Pedro Castillo.

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The S&P BVL/Peru (SPBLPGPT) closed with a 0.14% drop. The financial and industrial sectors had the largest declines during the day.

Trevali Mining (TV), Credicorp (CRECAPC1) and Sociedad Minera Cerro Verde (CVERDEC1) shares ended the session with the sharpest losses.

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Congress on Monday was debating a motion of censure against Juan Silva, Minister of Transportation and Communications, which alleges he does not have “the due capacity and suitability for the exercise of the position”, according to the document presented by the congress members who supported the motion.

In addition, Renovación Popular party legislator José Cueto said his faction has enough votes to force a summons of President Castillo to declare before Congress.

🍝 For the Dinner Table Debate:

Climate-related impacts are already “widespread” and, in some cases, “irreversible,” according to the latest report by the Intergovernmental Panel on Climate Change (IPCC).

The analysis also concluded that heat-related human mortality has increased and that extreme weather events and temperatures have exposed millions of people to food insecurity and malnutrition.

Read More: Global Warming Is Outrunning Efforts to Protect Human Life, Scientists Warn

IPCC scientists determine that some impacts are already “irreversible” and that as many as 3.6 billion people now live in environments that are “highly vulnerable to climate change.”

Rich countries, which are most responsible for carbon dioxide pollution, have more resources to prepare for its effects, the paper added. However, poorer countries, with little or no responsibility for climate change, face the brunt of the impact.