U.S. Stocks Fall as Oil Prices Surge; Peru Tops LatAm Markets

Commodity price rises renew concerns over inflation and the Fed’s next steps at its March meeting

Photographer: Tim Boyle/Bloomberg
March 01, 2022 | 06:25 PM

A roundup of Tuesday’s stock market results from across the region

🗽 On Wall Street:

U.S. stock markets closed with losses again Tuesday, amid the tension generated by the war between Russia and Ukraine.

The spike in commodity prices renewed concerns about inflation and the next steps to be taken by the Federal Reserve, which is expected to raise interest rates at its March meeting.

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The performance of the main indicators was also affected by the fall of Apple shares (AAPL), the largest company by market capitalization, after it announced that it would stop selling its products in Russia.

The Nasdaq Composite (CCMPDL) slipped 1.59%, while the S&P 500 dropped 1.55% and the Dow Jones Industrials fell 1.76%.

“Traders are trying to reduce their exposure to anything to do with Russia, and some are worried about the advent of a prolonged economic slowdown,” said Edward Moya, an analyst at Oanda.

🔑 Key Events of the Day:

Oil prices again broke a barrier not seen since 2014 after both benchmarks surpassed $104 as concerns grow that the war in Ukraine will cause a supply disruption.

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The European Union approved the exclusion of seven Russian banks from the SWIFT transfer system, including VTB Bank PJSC, the latest in a list of financial sanctions against Russia, one of the world’s largest oil producers.

Banks such as Goldman Sachs (GS), Morgan Stanley (MS) and JPMorgan Chase (JPM) have raised their oil price forecasts, anticipating possible supply disruptions, Bloomberg reported.

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

Bitcoin (XBT) continued its upward trend, and is now above $43,000.

🏅 The Leader:

The Peruvian stock market rebounded after closing Monday with the worst performance in Latin America, affected by the tensions caused by the war in Ukraine and the political uncertainty generated by a move in Congress to remove President Pedro Castillo.

Despite the negative environment, the S&P BVL/Peru (SPBLPGPT) closed Tuesday up 1.68%, pushed up by sectors such as materials, consumer staples and industrials.

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Shares of mining companies such as Minsur (MINSURI1), Buenaventura Mines (BVN) and Southern Copper (SCCO) performed well in the session. The price of copper, one of the main sources of income for the Peruvian economy, has benefited from the performance of raw materials and closed Tuesday at $9,883.50.

Despite the impact of the war in Ukraine, a report from Renta4 said Tuesday that “while it is true that ‘market noise’ may bring some volatility in the short term, we will not have to wait long to see how stock prices return to normal” in the Peruvian stock market.

Brazil’s and Argentina’s markets remain closed for a holiday.

📉 A Bad Day:

Chile’s main index Ipsa (IPSA) ended the day with the worst performance among its Latin American peers, after having one of the strongest performances on Monday, closing down 2.19%.

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Affected by the fall on U.S. markets, the Ipsa also reacted negatively to news that the Chilean economy grew below expectations in January, with the central bank’s monthly index of economic activity up 9% compared to January 2021, a percentage slightly below the estimate.

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Basic consumer goods, communication services and information technology sectors had the worst performance during the day.

The shares of Enel Chile (ENELCHIL), Cervecerías Unidas (CCU) and Parques Arauco (PARAUCO) were among the worst perormers.

🍝 For the Dinner Table Debate:

Around 2.4 billion women of working age do not have the same opportunities as men, and 178 countries still maintain legal barriers that prevent their full economic participation, according to a World Bank study released Tuesday.

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Whether it’s a young woman starting their first job, a mother juggling work and childcare, or a woman on the verge of retirement, the indicators show how laws affect women throughout their working lives as well as their entrepreneurship.

Globally, women have just three-quarters of the legal and economic rights granted to men in the areas analyzed. In addition, in 86 countries women still face some form of labor restriction, and in 95 nations they do not guarantee equal pay.

In a score out of 100, in Latin America, only Peru and Paraguay score above 90. They are followed by Ecuador (89.4), Bolivia (88.8), El Salvador, Mexico and Uruguay (88.8), Costa Rica, the Dominican Republic and Nicaragua (86.3).