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U.S., Latin American Markets Close April With Steep Losses

West Texas Intermediate crude closed its fifth straight month of gains

The Nasdaq MarketSite in New York, U.S. Photographer: Michael Nagle/Bloomberg
April 29, 2022 | 06:25 pm

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

🗽 On Wall Street:

The weight of technology stocks, and their poor performance during April, led U.S. stock markets to both close Friday and the month with losses.

Technology stocks have faced weeks of uncertainty due to a more restrictive stance by the Federal Reserve. This week, they were compounded by quarterly reports from Apple (AAPL) and Amazon (AMZN), which disappointed investors.

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The e-commerce company led Friday’s decline with a 14% drop, its worst since 2006.

On Friday the S&P 500 fell 3.63% and accumulated a monthly decline of 8.80%, the largest since March 2020. Meanwhile, the Nasdaq Composite (CCMPDL) lost 4.17% on the day and brought its April decline to 13.26%, its sharpest since 2008.

The Dow Jones Industrials also fell 2.77% on Friday and 4.91% during the month.

“U.S. stocks didn’t stand a chance after large-cap tech earnings disappointed and the employment cost index posted a record quarterly gain,” Edward Moya, an analyst at Oanda, said.

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Employment costs beat forecasts. The Employment Cost Index (ECI), a broad gauge of wages and benefits, advanced 1.4% in the first quarter, according to U.S. Labor Department figures. Compared to a year earlier, the labor cost index rose 4.5%, adding to inflation concerns.

🔑 The Day’s Key Events:

The benchmark West Texas Intermediate (WTI) closed its fifth consecutive month of gains, boosted by lockdowns in China, the world’s top oil importer, and as the war in Ukraine continues to roil commodity markets.

WTI’s performance chalked up its longest monthly winning streak since January 2018. The Russian invasion is poised to enter its third month and the chances of Europe opting for a total blockade on oil coming from Russia are increasingly high.

In addition, China is on track to record the weakest demand since the early days of the pandemic as it continues its strict zero-Covid policy to deal with a new outbreak of the virus.

“Next week will be critical, as we will get official selling prices from Saudi Arabia as a good litmus test of how much demand is suffering in China,” Rebecca Babin, senior energy trader at CIBC Private Wealth Management, told Bloomberg.

👑 The Leader:

The Peruvian stock exchange (SPBLPGPT) was the only one in Latin America to close with gains, escaping the contagious effect of the US stock markets, which fell by up to 4%.

The performance of Buenaventura (BUENAVC1), Peru’s largest publicly traded producer of precious metals, weighed on the Peruvian market. Roque Benavides, president of the company, said he believes that the country will avoid radical changes in the sector and said that the Peruvian President Pedro Castillo lacks support to push for a constitutional reform.

When asked if Peru is a good investment at this time given all the unrest, he said, “For Roque Benavides, yes,” Bloomberg reported.

The company announced its quarterly results on Thursday, with revenues of $232.9 million, up from $185.9 million in the first quarter of last year.

📉 A Bad Day:

However, looking at April’s balance, none of Latin America’s stock exchanges made gains, with the region’s two largest markets leading the losses.

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The S&P BMV/IPC (MEXBOL) closed Friday’s session down 2.27%, dragged down by communication services, industrials and financials.

América Móvil (AMXL) shares were among the worst performers on Friday.

In addition, during the day, it was revealed that Mexico’s economy advanced less than the market expected in the first quarter. Gross domestic product grew 0.9% from the previous quarter, versus the median estimate of analysts surveyed by Bloomberg of 1.1%.

On an annual basis, Latin America’s second-largest economy grew 1.6% between January and March.

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On a monthly basis, the S&P BMV/IPC accumulated a decline of more than 9%, while Brazil’s Ibovespa (IBOV), also closed lower on Friday and accumulated a monthly drop of more than 10%.

🍝 For the Dinner Table Debate:

Former soccer player David Beckham won key approval to make his dream stadium for Inter Miami, a team he owns with a group of partners, a reality.

Miami city commissioners voted to authorize leases that will allow the development of a sports complex, and which will include a 25,000-seat stadium, 750 hotel rooms, retail space and community fields.

“This will once again put us on the world stage,” City of Miami mayor Francis Suarez said after the vote.

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Inter Miami, a Major League Soccer (MLS) team, highlighted the economic impact of the project and said it will generate billions of dollars in rent and tax revenue over the term of the lease.

“The city is going to give zero dollars,” Suarez added in advance of the commission vote. “We’re going to get $2.6 billion over 99 years in revenue for the city.”