A roundup of Wednesday’s stock market results from across the region
🗽 On Wall Street:
U.S. stock markets reversed the losses seen earlier this week and Wednesday was a day of gains for the main indices, with tech stocks leading the upward trend, while bond traders see less likelihood of the Federal Reserve taking an even more hawkish stance, Bloomberg News reported.
The S&P 500 rose 1.12%, while the Nasdaq Composite (CCMPDL) gained 2.03% and the Dow Jones Industrials advanced 1.01%.
“U.S. stocks are rallying as the bond market sell-off appears to be over for now. The Fed’s rate hike expectations will be tested in the coming months and many traders fear that geopolitical and inflation risks will force it to be less aggressive with monetary tightening later this year,” explained Edward Moya, a senior analyst at Oanda.
Investors were also looking ahead to the start of the financial results season, which is expected to show that, despite the rising cost of living, the U.S. economy is in good health.
🔑 The Day’s Key Events:
Oil prices extended their recovery, countering the downward trend seen at the beginning of the week, when they fell below the $100 mark.
The boost came as traders saw a shortfall in global supply after the International Energy Agency (IEA) reported that OPEC+ members only managed to provide 10% of the promised supply increases for March.
This was enough for prices to continue to rise, despite the fact that in the same report the IEA cut its forecast for crude demand this year, after Beijing re-imposed lockdowns to contain the spread of Covid-19.
“Prices are now close to pre-invasion levels, but remain worryingly high, and are a serious threat to the global economic outlook,” the IEA said in the report.
👑 The Leader:
Argentina’s Merval (MERVAL) led the gains in Latin America, on a day in which most of the region’s stock markets closed with advances.
Cresud (CRES), Loma Negra (LOMA) and Telecom Argentina (TECO2) shares were among the best performers.
Brazil’s Ibovespa (IBOV) gained 0.55%, maintaining its positive performance amid the advance of commodities and the recovery of the U.S. stock markets with the beginning of the financial balance sheet season.
Mexico’s S&P BMV/IPC (MEXBOL) closed up 0.49%.
📉 A Bad Day:
The Peruvian and Colombian stock exchanges bucked the upward trend on Wednesday, with the S&P BVL/Peru (SPBLPGPT) down 1.02%, its second consecutive day of losses, as industrial, public services and financial sectors dragged the index down, while Sider Peru’s shares tumbled 20.5%.
The risk of Peru’s Congress approving a pension withdrawal was transferred to some companies, as pension funds would have to restructure their portfolios in view of a possible liquidation of their investments to allow for withdrawals.
Colombia’s COLCAP index fell 0.68%, due to the drop in Ecopetrol shares, which closed down 6.5% and were the worst performer of the day.
🍝 For the Dinner Table Debate:
March inflation in Argentina soared to 6.7%, the highest since April 2002, when it reached 10.4%, according to data published on Wednesday by statistics agency INDEC.
Year-on-year inflation reached 55.1%.
The government had already anticipated that the month’s figure would be higher than 6%, but the figure was higher than expected by the private sector. “March inflation accelerated also driven by the international context”, the Ministry of Economy said in a statement.
For Víctor Beker, director of the Center for the Study of the New Economy (CENE) of the University of Belgrano, the inflation rate “is a multi-causal phenomenon and, therefore, the success of any anti-inflationary strategy requires an integral approach capable of attacking all the factors”.
The concern in the government is that the figures published this Wednesday by INDEC will generate more pressure on prices in the coming months. In March, the projection of respondents to the central banks market expectations survey was 59.2% for the annual estimate, although some consultancy firms forecast it will be comfortably above 60% this year.
