Hawkish Fed Drags Down U.S. Markets; Peru’s Political Crisis Pushes Shares Lower

Oil prices slipped again on Wednesday for the second consecutive day after the International Energy Agency’s announcement that it will release strategic reserves

Sello de la Fed
April 06, 2022 | 08:45 PM

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

🗽 On Wall Street:

The Federal Reserve once again had an impact on the mood of U.S. markets on Wednesday, which added a second day of losses this week. The central bank’s minutes, released today, reaffirmed that its stance is inclined to raise interest rates and reduce its balance sheet.

Fed board of governors member Lael Brainard had already anticipated this stance on Tuesday, calling the task of easing inflationary pressure “crucial”, and saying the Fed will begin reducing its balance sheet as soon as next month.


Also, the minutes showed that “many” officials would have preferred to raise rates by half a percentage point - rather than the quarter-point-rise at the March meeting, but decided against it in light of the Russian invasion of Ukraine.

All of this hints at a more hawkish approach.

The S&P 500 fell by 0.97%, while the Nasdaq Composite (CCMPDLL) sank 2.22% and the Dow Jones Industrials slipped 0.42%.

With this stance, money market traders are betting that the Federal Reserve will make 225 basis points of interest rate hikes by the end of the year, Bloomberg News reported.


🔑 The Day’s Key Events:

Oil prices fell again for the second consecutive day after the International Energy Agency (IEA) announced that it will make a coordinated release of its strategic reserves to control the increase in the cost of barrels.

The IEA announced that it will deploy 60 million barrels of oil, which will reinforce a similar measure already taken by the United States. Fatih Birol, executive director of the IEA, said that members will release an additional 120 million barrels of oil, including around 60 million barrels by the U.S.

Crude oil prices fell more than 4% and the WTI benchmark retreated below $100.

The Agency expects Russian oil production to fall by a quarter this month, leaving a three-million barrel-per-day hole in the global energy supply. The emergency stockpiles will go some way to filling that gap.

🥇 The Leader:

Chile’s IPSA index (IPSA) was the only Latin American index that posted gains Wednesday, distancing itself from the losses on the U.S. stock markets, which affected the international mood.

Chile’s main stock market index rose by 0.86%, driven by the performance of the financial, energy and communication services sectors.


Shares of Banco de Chile (CHILE), Banco de Crédito e Inversiones (BCI) and Cia Sud Americana de Vapores (VAPORES) were among the top performers.

Mall Plaza (MALLPLAZ) was also among the best performers, amid news that it may issue one or a combination of bonds as of April 7, according to information from the Santiago Stock Exchange.

📉 A Bad Day:

The Peruvian stock market began to reflect the political crisis in the country, amid marches by several sectors protesting against the increase in fuel, food and fertilizer prices.

The president of Peru, Pedro Castillo, had declared a state of emergency on Monday due to riots and violence amid the protests, bur which increased with the protests of transporters and farmers in various parts of the country. Castillo imposed a curfew in Lima and Callao, but which was lifted on Tuesday night, with protests continuing in some areas of the country.


In the midst of this scenario, the S&P BVL Peru dropped 1.41%.


Brazil’s Ibovespa (IBOV) dropped 0.55%, affected by the performance of the U.S. markets, while Mexico’s S&P BMV/IPC (MEXBOL) shed 0.20%.

🍝 For the Dinner Table Debate:

Former England soccer player Steve Hodge is auctioning a piece of memorabilia that any fan of the late Argentine striker Diego Armando Maradona would like to own: the Argentine national team jersey in which Maradona played against England in the 1986 World Cup in Mexico City, the shirt in which Maradona scored his infamous “hand of God” goal.

After the match, Hodge exchanged his jersey with Maradona and was to sell it from this Wednesday, 36 years later, at Sotheby’s auction house.


It is estimated that the blue number 10 jersey will sell for between 4 and 6 million pounds sterling (an estimated maximum of $7 million). Bids will be received between April 20 and May 4.

The iconic jersey had been at the National Football Museum in Manchester since 2002.