S&P 500 Rebounds to Close Higher; Chile’s IPSA Leads LatAm Recovery

The Economic Commission for Latin America and the Caribbean (ECLAC) has joined the wave of pessimism regarding the region’s growth forecasts

Un operador señala el monitor que muestra un gráfico del índice S&P 500 (SPX) en el piso de la Bolsa de Nueva York (NYSE) en Nueva York, Estados Unidos, el viernes 16 de febrero de 2018.  Fotógrafo: Michael Nagle/Bloomberg
April 27, 2022 | 06:25 PM

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

🗽 On Wall Street:

U.S. stock markets rebounded on Wednesday and closed higher after a massive sell-off of technology stocks sent the major indices lower on Tuesday.

Opportunity buying boosted the S&P 500 after yesterday’s declines. In addition, investors continue to wait for quarterly reports to confirm the good state of the U.S. economy.

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The mood was helped by Microsoft’s (MSFT) results, even though Alphabet’s (GOOGL) results disappointed after YouTube’s revenue came in lower than expected.

“Wall Street seems to think the massive tech sell-off has been overdone, despite concerns about a hawkish Fed and uncertainty with Chinese growth,” said Edward Moya, an analyst at Oanda.

Amid this backdrop, the S&P 500 advanced 0.21%, while the Dow Jones Industrials gained 0.19%. The Nasdaq Composite (CCMPDL), which had plunged on Tuesday, was little changed today and finished down 0.01%.

Optimism was also helped by Chinese President Xi Jinping’s pledge of more infrastructure projects, the latest step to support an economy hit by lockdowns to tackle Covid-19, Bloomberg reported.

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🔑 The Day’s Key Events:

The Economic Commission for Latin America and the Caribbean (ECLAC) joined the wave of pessimism already anticipated by the International Monetary Fund and the World Bank. The organization revealed its economic projections for the region on Wednesday, also predicting a slowdown in the region’s economy.

According to ECLAC’s estimates, an average growth of 1.8% is expected amid a context characterized by the war in Ukraine, inflationary problems and the increase in financial costs.

In addition, the organization said in a press release, “the lower growth expected will be accompanied by higher inflation and a slow recovery of employment”.

The estimates also indicated that the economies of South America will grow by 1.5%, those of Central America plus Mexico by 2.3%, while those of the Caribbean will grow by 4.7% (excluding Guyana).

👑 The Leader:

Chile’s IPSA (IPSA) led the recovery of Latin American stock markets, after a day of losses on Tuesday, and closed with a rise of 1.57%.

The raw materials, information technology and consumer staples sectors led the gains.

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Shares such as CAP (CAP) and SQM/B (SQM/B) closed in the green on a day when international commodity prices also traded higher.

The trend was followed by Brazil’s Ibovespa (IBOV), which closed up 1.05%.

The Chinese government’s efforts to support the economy amid tightening of restrictions helped boost iron ore, which contributed to the rise of shares linked to the raw material in the Brazilian market.

Stocks such as Vale (VALE3), as well as Gerdau (GGBR4) and CSN (CSNA3) benefited from this boost.

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📉 A Bad Day:

Mexico’s stock market had the worst performance in Latin America, with the communication services and healthcare sectors having the worst performance on the day and influencing the declines.

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Specifically, Grupo Televisa (TLEVICPO), América Móvil (AMXL) and Walmex (WALMEX*) shares were among the worst performers of the day.

All three stocks fell after the delivery of their quarterly reports.

🍝 For the Dinner Table Debate:

Although the restrictions on mobility that were established at the beginning of 2020 are beginning to be lifted, following the progress of vaccination and coexistence with the virus, there are some governments that have returned to implementing zero tolerance, such as China, where a strong resurgence has rekindled the pandemic.

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In this context, Bloomberg updated its Covid Resilience Ranking, according to which Chile was placed in April as the best country in Latin America to live with the pandemic, as it had been in March. The Latin American nation ranked 13th out of 53 countries, climbing five places compared to March.

Meanwhile, Peru fell nine places to 47th position, making it the least convenient country in the region in April, according to Bloomberg’s evaluation. This displaced Brazil, which had been the worst positioned country in the region in March, and now ranks 41st in the global table.

The other Latin American countries in the ranking are: Argentina, which climbed one position and finished 22nd during April; Colombia, which fell 9 places and finished 28th; and Mexico (39th, down four positions).