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U.S., LatAm Markets Fall As Oil Climbs Back Above $100

Oil prices rose above $100 per barrel again on Tuesday

An idled oil pumping unit in Cabimas, on the East coast of Lake Maracaibo, in Venezuela. Photographer: Ana Maria Otero Borjas/Bloomberg
April 12, 2022 | 06:10 pm

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

🗽 On Wall Street:

U.S. stocks extended Monday’s losses as the recovery in oil prices fueled concerns that inflation will continue to hit consumers’ wallets on Tuesday.

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The S&P 500 retreated 0.34%, while the Nasdaq Composite (CCMPDL) slipped 0.30% and the Dow Jones Industrials followed the same trend and fell 0.26%.

“Persistent inflationary pressures may continue to affect investor confidence,” John Lynch, chief investment officer at Comerica Wealth Management, told Bloomberg News. Big bank stocks were the biggest losers in the session ahead of the start of the financial results season that kicks off Wednesday.

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Worries about expensive oil ultimately trumped inflation data released this morning, which showed signs that the cost of living hike may be easing.

Although consumer prices rose in March to a yearly increase of 8.5%, the highest since 1981, underlying inflation rose less than expected.

🔑 The Day’s Key Events:

Oil prices marked a day of recovery with both major benchmarks back above the $100 threshold after China eased the lockdown measures with which it is dealing with a new outbreak of Covid-19.

Shanghai has eased closures of some housing complexes, even though most people remain housebound. Authorities have warned that restrictions will return if cases rise again.

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Investors were also on the lookout for Russian President Vladimir Putin’s statement that he will continue his offensive on Ukraine, a scenario that has put upward pressure on prices.

In addition, the market received data from the Energy Information Agency, which reported that it now expects U.S. crude oil production to grow at a slower pace as shale producers face higher production and labor costs.

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📉 A Bad Day:

All of Latin America’s stock markets closed with losses Tuesday, with Peru’s S&P BVL/Perú (SPBLPGPT) posting the sharpest decline, of 1.34%.

Beyond the international contagion, the political instability in Peru is still being felt, amid protests against the government of Pedro Castillo and the rising cost of living.

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In addition, Peru slipped downward on the list of major mining investment destinations, according to the Fraser Institute, which revealed Tuesday in its annual survey that the country ranks 42nd out of 84 among the best destinations for mining investment.

Brazil’s Ibovespa (IBOV) fell 0.69%, while Mexico’s S&P BMV/IPC (MEXBOL) dropped 1.02%.

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🍝 For the Dinner Table Debate:

Britain’s Prime Minister Boris Johnson and his Chancellor of the Exchequer Rishi Sunak were handed fines for attending social gatherings that broke rules imposed on the country during the Covid-19 lockdown.

The leader of the opposition Labour Party, Keir Starmer, said the fines are a sign that the two men had “repeatedly lied to the British public”, after both Johnson and Sunak had denied attending such events, or that events that they did attend did not break any rules.

The allegations of partying during lockdown pushed Johnson’s tenure to the brink earlier this year, when more than a dozen of his own MPs publicly called on him to resign.