A roundup of Monday’s stock market results from across the region
🗽 On Wall Street:
U.S. stock markets fell in a volatile session on Monday, as investors await a week full of corporate results and are still weighing the decisions that the Federal Reserve will have to make to control inflation.
The S&P 500 dropped 0.02%, while the Nasdaq Composite (CCMPDL) fell by 0.14% and the Dow Jones Industrials showed the same trend and retreated 0.11%.
Traders will be watching for results to be reported during this week by companies including Netflix (NFLX), Tesla (TSLA), United Airlines (UAL), American Airlines (AAL) and Snap (SNAP), among others.
“Volumes are light on this Easter Monday, with many European markets closed and even more families on spring break,” Art Hogan, chief market strategist at National Securities, told Bloomberg. “In that environment, it doesn’t take a big shift in sentiment to produce a relatively outsized move.”
With 7% of S&P 500 companies reporting quarterly results, most companies reported a positive revenue surprise and analysts believe first-quarter earnings will rise 5.3%, according to a FactSet report.
🔑 The Day’s Key Events:
The World Bank has reduced its global growth forecast, its president David Malpass announced in a conversation with journalists. The Washington-based institution lowered its estimate for global expansion in 2022 to 3.2% from January’s forecast of 4.1%.
The downgrade was due to a cut in the outlook for Europe and Central Asia, which includes Russia and Ukraine, Malpass said. The global forecast for this year compares with a 5.7% expansion in 2021, he added.
The estimate comes amid spring meetings of the World Bank and the International Monetary Fund (IMF), which will release its own forecasts on Tuesday. For now, the IMF previewed a report in which it warned that household and corporate debts, which rose amid the Covid-19 crisis, may be a drag on economic recovery.
The agency’s calculations indicate that the accumulation of leverage, i.e. the credits that have been acquired, could slow economic recovery by a cumulative 0.9% of GDP in advanced economies and 1.3% in emerging markets over the next three years.
👑 The Leader:
On the return to trading after the Easter break, Argentina’s Merval (MERVAL) was the only Latin American stock exchange to close with gains on Monday, rising 0.22%, thanks to the performance of stocks such as Cresud (CRES), Loma Negra (LOMA) and Banco Macro (BMA).
Argentina’s Economy Minister Martín Guzmán traveled to to the United States on Monday to participate in the IMF and World Bank Spring Meetings, after a weekend of meetings with officials of his economic team.
Prior to the meetings, as a signal to the IMF, the country’s Central Bank raised interest rates, in a context in which the economic team is trying to send signals to the organization regarding what was signed weeks ago.
In the meantime, it called for public hearings to apply a new increase in gas and electricity. This was confirmed by Argentina’s Energy Secretariat, which stated that the increases will be discussed on May 10-12.
📉 A Bad Day:
Chile’s IPSA (IPSA) had the worst performance in the region on Monday, down 1.05%, with energy company shares, IT and real estate driving the index down.
Chilean investors were attentive Monday to a debate in Congress on whether to approve a fifth withdrawal of pension funds, which will compete with a bill presented by the government that would allow withdrawals to be conditioned.
The first legislation would open the way for new withdrawals of up to $15 billion, while the government’s alternative plan would allow workers to access some $3 billion in retirement funds.
Brazil’s Ibovespa (IBOV) also closed with losses. Traders were awaiting the participation of the president of the Central Bank, Roberto Campos Neto, in an IMF event, looking for signals on interest rates.
The Mexican stock market’s S&P BMV/IPC index (MEXBOL) ended the session down 0.06%.
🍝 For the Dinner Table Debate:
The founder of the Argentine fintech Ualá, Pierpaolo Barbieri, announced on Monday the launch of a venture capital (VC) fund that will start operating with some $30 million injected by General Catalyst and the founder of Brevan Howard, Alan Howard, among others.
Through his new firm 17Sigma, Barbieri will focus on investing in early-stage startups in Latin America. Sponsors also include former SoftBank executives Marcelo Claure and Paulo Passoni.
The launch follows a record year for startup funding in Latin America in 2021, with some $15 billion raised, which helped create 17 new companies valued at $1 billion or more, according to data from the Association for Private Capital Investments in Latin America.
17Sigma will focus on pre-seed and seed rounds in Latin America, as there is less interest in that stage of financing from large global funds, according to Barbieri.
“When we thought about this project, we thought the most effective way to help the community and disrupt markets is to bet at the early stage,” Barbieri said. “That’s when the founders need the most help, they need ideas, they’re building teams,” he added.