U.S. Markets Post Gains; Energy Shares Power MERVAL Hike

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

🗽 On Wall Street:

U.S. stock markets had an eventful day, in which they returned, for the second consecutive day, to record gains.

The S&P 500 ended the day up 0.5%. During the week the index swung between gains and losses as investors weighed the risks of monetary policy tightening to the economic recovery and the war in Ukraine. The Dow Jones Industrials advanced 0.44%.

“I think this week has been a great confirmation of why we shouldn’t worry too much about the short term and volatility or the headlines of the day, so to speak, because obviously it bounces back as quickly as it declines,” Nancy Daoud, chief executive officer and private wealth adviser at Ameriprise Financial Services LLC, told Bloomberg TV.

🔑 The Day’s Key Events:

Oil posted its first weekly gain in three weeks on Friday as the European Union continued to debate how it can lessen its dependence on Russian exports, and news reports suggested drone strikes on Saudi Arabia’s energy and power facilities were intensifying.

Crude oil in New York rose to near $113 a barrel, after earlier falling below $109 a barrel.

“The oil market looks like it won’t be able to shake off short-term disruption fears and that should suggest prices could continue to rise strongly next week,” said Edward Moya, an analyst at Oanda.

🥇 The Leader:

On Friday, Argentina’s Merval (MERVAL) index registered the best performance in Latin America after closing with a gain of 3.22%. The energy sector drove the good mood of the index.

The shares of Transportadora de Gas del Sur, Transportadora de Gas del Norte, Cresud SACIF (CRES) and Compañía de Transporte de Energía drove the index’s rise.

The board of directors of the International Monetary Fund (IMF) approved the agreement reached weeks ago by the organization’s staff with the government of Argentina to refinance the country’s $45 billion debt approved in 2018, concluding a process that has dragged on for more than two years.

Colombia’s COLCAP index rose 2.03%, driven by the performance of the materials, energy and utilities sectors, which showed increases of over 1%.

Peru’s S&P BVL (SPBLPGPT), Chile’s IPSA (IPSA) and Brazil’s Ibovespa (IBOV) also closed out the day with gains.

📉 A Bad Day:

The Mexican stock exchange (MEXBOL) had the worst performance among its Latin American peers and was the only one in the region to fall on Friday, down 0.68% at closing after being dragged down by the performance of sectors such as materials, real estate and health.

🍝 For the Dinner Table Debate:

Each Latin American country measures poverty and indigence using different methodologies. Without taking this into account, it is striking that in Argentina poverty now affects four out of every 10 citizens, while in Peru the proportion is three out of every 10, and in Chile one out of every 10 inhabitants.

Given the difficulty of comparing what is happening in each country in terms of indigence and poverty, the Economic Commission for Latin America and the Caribbean (ECLAC) published its Social Panorama of Latin America report, which charts the impact of the pandemic in the countries of the region, with numbers corresponding to 2021 and 2020.

Under these criteria, and based on the average annual (official) exchange rate, in 2020 in Argentina it took $78.7 per person to overcome the extreme poverty line and $188 to overcome the poverty line. In In Colombia, $44 and $86.8 was needed, respectively.

In Brazil, $40.70 was required to cross the extreme poverty line and $89 to cross the poverty line. Mexicans required $62.50 and $129.70, respectively, while in Chile the costs of surpassing those levels are $72.60 and $157.20, respectively. Peru needed US$42.90 and US$94.40, respectively.

ECLAC points out that the social crisis continues despite the economic reactivation, with unemployment rates and levels of poverty and extreme poverty higher than those observed before the COVID-19 pandemic.