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Quarterly Reports Boost U.S. Markets; Peru Leads LatAm Gains

Oil prices rise as investors remain wary of new blockades on Russian crude exports

Signage in front of Meta Platforms headquarters in Menlo Park, California, U.S. Photographer: David Paul Morris/Bloomberg
April 28, 2022 | 07:45 pm

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

🗽 On Wall Street:

U.S. stock markets were boosted by strong quarterly earnings reports on Thursday, even after a surprise GDP decline in the first quarter of the year. Companies accounting for approximately 50% of the S&P 500 market capitalization have already reported their balance sheets, with 76% of companies beating projections, according to Credit Suisse estimates.

The reports boosted stocks such as Meta Platforms (FB), which had its biggest rally since 2013, as well as stocks such as PayPal Holdings (PYPL) and Qualcomm (QCOM).

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The optimism fell short of the report from Amazon (AMZN), whose results disappointed and plummeted its shares in extended trading. Apple (AAPL) also reported after the market closed.

The S&P 500 advanced 2.47%, while the Dow Jones Industrials gained 1.85% and the Nasdaq Composite (CCMPDL) advanced 3.06%, boosted by technology stocks.

Markets withstood data on the U.S. economy, which unexpectedly contracted last quarter for the first time since 2020. Gross domestic product fell to an annualized rate of 1.4%, after growing 6.9% at the end of 2021, the Commerce Department’s preliminary estimate showed Thursday.

Despite the figure, “private consumption and investment maintained a positive dynamic, in a sign that the stress in international logistics chains and the war in Ukraine has had no effect on their behavior so far,” according to a Bancolombia analysis.

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🔑 The Day’s Key Events:

Oil prices rose as investors watch for the possibility of new export blockades on Russian oil as the war in Ukraine does not appear to have a peaceful a solution in the short term.

German Economy Minister Robert Habeck said this week that his country has already reduced its dependence on Russian oil enough to make a full embargo “manageable,” which could lay the groundwork for a larger ban.

“With Germany open to it, the likelihood of a ban has increased even more. The question will be whether or not Hungary also supports it to pass it, as it needs to be unanimous,” Giovanni Staunovo, a commodities analyst at UBS, told Bloomberg.

Tensions have risen as the European Union tries to maintain a unified stance to the Russian gas blockade after the Kremlin demanded payment in rubles for supplies leaving its country.

According to EU officials, companies that open a ruble account to pay for Russian gas would violate sanctions imposed by the bloc.

👑 The Leader:

In tune with the gains in the U.S. and the recovery of raw materials, the main Latin American stock exchanges closed the session with gains.

Peru’s stock exchange (SPBLPGPT) had the best performance thanks to the performance of the utilities, materials and finance sectors.

Brazil’s Ibovespa (IBOV) also closed with gains.

The information technology, materials and real estate sectors performed the best. Stocks such as Petrobras (PETR4) and Vale (VALE3) closed higher, helped by the performance of raw materials.

The Brazilian mining company announced Thursday the largest share buyback program in its history to reward shareholders concerned about the prospects of weakening Chinese demand.

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The world’s second-largest iron ore producer said late Wednesday that it will buy back up to 500 million shares (about 10% of the total number outstanding) over 18 months.

Mexico’s stock market matched the gains and the S&P BMV/IPC (MEXBOL) closed up 0.50%.

🍝 For the Dinner Table Debate:

Buying a house in Latin America requires raising long-term financing, and much more so if you live in the capitals of Argentina and Chile where, at least until the second half of 2021, the most expensive square meter in the region was located, according to a study by the Financial Research Center of the Torcuato Di Tella University business school.

The analysis took into account homes in neighborhoods inhabited by young middle and upper-middle class professionals, without taking into account those apartments that are single-room apartments. Prices are as high as $300,000, with measurements ranging from 20m2 to 100m2, and with which Bloomberg Línea calculated the number of minimum wages needed in the main economies of Latin America to acquire a standard 60 m2 home.