Inflation Data Drags Down U.S. Markets; Argentina’s Merval Climbs 3.5%

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

🗽 On Wall Street:

U.S. stock markets fell again on Thursday after inflation data reignited concerns about the cost of living, with inflation at 7.9% in February, a high not seen in four decades, and following a 7.5% hike in January. Although economists had expected February to be the peak month for the figure, the Russian invasion of Ukraine caused a jump in commodity prices that will impact the cost of living.

The S&P 500 fell 0.43%, while the Nasdaq Composite (CCMPDL) slid 0.95% and the Dow Jones Industrials was down 0.34% at closing.

“The biggest risk is inflation,” Fiona Cincotta, senior market analyst at City Index, told Bloomberg. “While central banks will try and rush through as much tightening as possible in the first half of the year, I think looking further ahead, they will struggle if growth really starts to be affected.”

🔑 The Day’s Key Developments:

In addition to inflation, markets also kept an eye on negotiations between Russia and Ukraine, after the latest talks in Turkey failed to produce any results.

Optimism had gripped investors on Wednesday, after Kyiv said it was willing to discuss its neutrality status and NATO membership, but there was no breakthrough in Thursday’s talks.

While the war rages, the economic siege against Moscow continues. JPMorgan (JPM) announced Thursday that it is ending its business in Russia and assured that it is currently conducting “limited activities” in that country, a move that follows Goldman Sachs (GS) becoming the first major Wall Street bank to leave Russia.

In response, the Kremlin is looking at confiscating and even nationalizing foreign-owned companies pulling out of the country, and their properties.

Credit Default Swap (CDS) trades, used as protection in case of default, have soared this week, a sign that Russia is on the verge of a default, Bloomberg reported.

🥇 The Leader:

In Latin America, Argentina’s Merval index (Merval) rebounded after Wednesday’s losses and closed with a hike of 3.50%, buoyed by the shares of Byma, Transportadora de Gas del Sur (TGSU2) and Cresud (CRES).

Argentine shares advanced as the discussion of the agreement with the International Monetary Fund takes place in Congress. There are expectations that the bill would be approved today by the Lower House, after the Government achieved the support of the opposition late on Wednesday .

“We are all working with the understanding that this is a turning point and that it is key that we have this solution to avoid a catastrophe”, said Sergio Massa, head of the Chamber of Deputies.

📉 A Bad Day:

Chile’s Ipsa (IPSA) index saw the worst performance among its Latin American peers and closed with a drop of 1.01%.

The industrial, financial and information technology sectors performed the worst during the day. The Chilean stock market moved in line with international stock markets, after the failure of negotiations between Russia and Ukraine.

Brazil’s Ibovespa (IBOV) slipped 0.21% while the Mexican stock exchange accompanied the losses and the S&P BMV/IPC (MEXBOL) ended the day with a fall of 0.97%.

🍝 For the Dinner Table Debate:

Until a few months ago, fans of English soccer club Chelsea were rejoicing: the team had won the Champions League, the most important club tournament in Europe, for the second time after almost a decade. Now, although the team is among the top three in the Premier League, and has one foot in the quarter-finals of this year’s Champions League, the club’s position has been thrown into doubt after the British government froze the assets of its owner, Russian Roman Abramovich.

Chelsea, a team with a market value of €883 million ($972 million), according to Transfermarkt, is now in limbo after Abramovich’s assets were frozen.

In essence, the club will be able to continue operating, but with certain restrictions. The government explained that it will not be able to sell new tickets for its matches, will not be allowed to sell merchandise, and will not be able to sign players or sign new contracts.

Prior to the Russian magnate’s assets being frozen, Bloomberg had published a list of possible buyers.