Worst Day of the Year for S&P 500, Dow Jones; Brazil’s Ibovespa Leads LatAm Losses

Commodity prices continue to rise amid the possibility the U.S. will impose an oil-import ban on Russia

March 07, 2022 | 07:01 PM

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

🗽 On Wall Street:

As fears grow over the impact that the war in Ukraine could have on economic growth and inflation, the U.S. stock markets began the week with losses, to the point that the S&P 500 closed with its worst performance so far this year.

The index lost 2.95%, the biggest decline since October 2020, while the Dow Jones Industrials gave up 2.37% and also had its worst day of the year.

Meanwhile, the Nasdaq Composite (CCMPDL) fell 3.62% and the Nasdaq 100, composed of leading technology stocks, sank 3.75%.


“The longer oil prices and inflation remain elevated, and thus threaten a premature demise of this economic expansion and bull market, the more investors will trim their exposure to stocks,” Sam Stovall, chief investment strategist at CFRA, wrote in a note.

New talks Monday between Ukrainian and Russian officials made only limited progress in negotiating a ceasefire, the government in Kiev said, while the United States, Germany, France and the United Kingdom discussed the possibility of implementing more sanctions against Russia.

🔑 The Day’s Key Developments:

Commodities prices continue to rise as the possibility grows that the United States will impose import restrictions on oil produced by Russia as the war in Ukraine enters its third week.


NATO members currently buy more than half of the 7.5 million barrels per day of crude oil and refined products that Russia exports.

In the first hours of trading Monday, oil prices rose above $130 per barrel and, although they later fell back to above $120, and the high price of commodities has set off alarm bells about the impact it could have on inflation.

In addition to oil, several metals are reaching maximum prices as a result of the conflict between Ukraine and Russia, as are certain foods and fuels. European gas, palladium, aluminum and wheat prices, among others, have been affected by the war.

Economists at Barclays (BCS) and JPMorganChase (JPM) are among those who have lowered global growth forecasts and raised them for consumer prices. Both expect expansion to be one percentage point lower and inflation to be one percentage point higher than their previous estimates.


📉 A Bad Day:

Brazil’s Ibovespa (IBOV), the main index of the largest stock exchange by market capitalization in Latin America, had the worst performance in the region, infected by the international mood in which none of the main stock exchanges registered gains, falling by 2.52%.

Investors are monitoring the war in Ukraine and the strong appreciation of raw materials worldwide. In addition, the performance of Petrobras’ common and preferred shares (PETR3; PETR4) weighed on the local performance.

According to information from Reuters, citing unidentified sources, the oil company is expected to request government approval this week to increase fuel prices at refineries. A small increase is expected, below international prices, two sources told the agency.


However, the government told Petrobras that it is considering temporarily reinstating fuel subsidies, used in 2018 by then-President Michel Temer, to absorb international volatility, a third person told Reuters, noting that the proposal has so far not been supported by the Economy Ministry, due to budget and spending constraints.

Mexico’s S&P BMV/IPC (MEXBOL) ended the session down 1.89%.

🍝 For the Dinner Table Debate:

The scene that had been foreseen some years ago in terms of women’s inclusion in the labor force amid the boom of the digital economy has been somewhat stymied by the effects of the Covid-19 pandemic, as many new jobs revolve around the digital economy, a sector in which women are not widely present.

Latin America has seen a nearly two-decade setback in women’s labor participation levels following the emergence of the virus, according to the Economic Commission for Latin America and the Caribbean (ECLAC). In addition, around 25 million women in the region were unemployed as of March of last year, according to the International Labor Organization (ILO).


According to IMF research, “women appear to be less endowed with some of the skills needed to thrive in the digital age”. Given the tasks they perform, an estimated 180 million women’s jobs globally are at high risk of being eliminated in the next 20 years.

Amid this scenario, organizations such as Girls in Tech and Laboratoria are among those helping to close the gap in the digital economy.