Powell Warning Sinks U.S. Shares, LatAm Markets Follow Suit

Elon Musk revealed he is exploring the launch of a public offering for Twitter after receiving no response to his hostile takeover bid

April 21, 2022 | 07:20 PM

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

🗽 On Wall Street:

U.S. Federal Reserve chairman Jerome Powell made a comeback on Thursday and with him losses in U.S. stock markets, after he set alarm bells ringing among investors by anticipating once again a more restrictive policy by the central bank to control inflation.

“I would say 50 basis points will be discussed at the May meeting,” Powell told a panel hosted by the IMF and speaking with European Central Bank President Christine Lagarde and other officials.

We are really committed to using our tools to get inflation back to 2%,” Powell said.


Following his remarks, the sell-off in Treasuries extended and the S&P 500 retreated 1.48%, as did the Nasdaq Composite (CCMPDL), which lost 2.07%, while the Dow Jones Industrials followed suit and fell 1.05%.

“The market is trying to digest a 10-year yield that is fast approaching 3.00%,” Joe Gilbert, portfolio manager at Integrity Asset Management, told Bloomberg. “This has important implications for equity valuations as credit spreads have also widened.”

🔑 The Day’s Key Events:

Elon Musk is serious in his bid to acquire the remaining shares of Twitter (TWTR) that he does not own and today revealed that he is exploring launching a takeover bid for the social networking company after receiving no response to his offer to buy it for $54.20 a share.


To finance the acquisition, “entities related” to Musk have received letters with commitments to provide financing of about $46.5 billion, according to documents filed Thursday.

Morgan Stanley (MS) and other financial institutions will provide about $25.5 billion in debt financing and Musk has committed to provide $21 billion in equity financing, according to the documents.

Twitter’s board, which has said it is open to discussing a deal, tried to rein in Musk with a shareholder rights plan, known as a “poison pill”, that makes it more expensive to acquire shares beyond a 15% stake.

📉 A Bad Day:

The poor performance of the U.S. stock markets spread to all Latin American markets on a day in which none of the main indices posted gains.

The sharpest losses were registered by the Chilean IPSA index (IPSA), dragged down by the performance of the materials, information technology and energy sectors.

The shares of Embotelladora Andina (ANDINAB), SQM (SQM/B) and CAP (CAP) were among the worst performers.

The Mexican stock market added to the losses, with the materials and communication services sectors influencing the downward path of the S&P/BMV IPC (MEXBOL).


Brazil’s market remained closed Thursday due to a holiday.

🍝 For the Dinner Table Debate:

Only five Latin American companies were included in a global ranking of ethics, prepared by the Ethisphere Institute, which published its latest report of the companies that excel in this area.

The 16th edition of the list recognizes 136 companies that have the best ethical business practices, which are measured through strategies that have a positive impact on employees, customers and communities.

In Brazil, Natura & Co Holding SA (NTCO3), a company in the health and beauty sector with 35,000 employees and annual revenues of approximately $7.92 billion, appeared on the list, according to Ethisphere’s official platform.

Colombia’s Cementos Argos SA (CCEMARGOS) also appeared on the list. The construction company has 7,450 employees and annual revenues of approximately $2.61 billion.