:quality(75)/cloudfront-us-east-1.images.arcpublishing.com/bloomberglinea/HBTF3MHSSJFJRKY3VDE2NHG2X4.jpg "Visitors in front of an electronic board displaying stock activity at the Brasil Bolsa Balcao (B3) stock exchange in São Paulo, Brazil. Photographer: Patricia Monteiro/Bloomberg")
A roundup of Friday’s stock market results from across the Americas
👑 Brazil leads in Latin America:
Latin American stock markets had a mixed day, amid the fall in the US markets and the rebound in some of the region’s main stock market indicators.
Brazil’s Ibovespa (IBOV) managed to break away from the international mood and marked the largest increase in the region, after ending the day with a rise of more than 2%.
Driven by the shares of Vale (VALE3) and steel companies, the main Brazilian index closed Friday’s session higher.
The mining company’s shares advanced, after the company approved the reorganization of the nickel and copper operations in Brazil, seeking to bring “more efficiency in processes and management”, according to a statement.
The announced reorganization boosts the expectation of not depending so much on iron ore.
The behavior came ahead of Sunday’s presidential election.
A first-round victory for incumbent Jair Bolsonaro or former president Lula da Silva remains unlikely and “not discounted by the markets,” JPMorgan Chase (JPM) equity strategist Emy Shayo said in a Sept. 29 note, Bloomberg reported.
📉 A bad day for Mexico’s BMV:
Mexico’s stock market followed the performance of the US markets and marked two consecutive sessions down in a week in which the mood was marked by the monetary policy decisions of central banks.
The S&P/BMV IPC (MEXBOL) closed lower, dragged down by the performance of the communication services, industrials and consumer staples sectors.
Investors reacted to Thursday’s decision by the Bank of Mexico that raised the benchmark interest rate by 75 basis points to leave it at a historic level of 9.25%, the highest since January 2008.
“We expect Banxico will continue to tighten policy to avoid further de-anchoring of inflation expectations in a context of persistently elevated inflation,” said Carlos Morales, director of Latin America sovereign risk at Fitch Ratings.
The Colombian stock market also fell a day after the central bank took interest rates to levels not seen in 14 years.
During Friday’s session, the Colcap (COLCAP) was hit by the poor performance of the shares of Ecopetrol (ECOPETL), and Grupo Sura (GRUPOSUR).
Both the Colcap and the S&P/BMV IPC accumulated two consecutive quarters of losses and were the only two stock exchanges in the region that fell between July and September.
🗽 On Wall Street:.
US stocks suffered their worst monthly rout since March 2020 after markets were repeatedly pummeled by the Federal Reserve’s resolve to keep raising interest rates until inflation is under control.
The S&P 500 closed a volatile session lower. The index posted its third straight quarter of losses for the first time since 2009. US Treasuries dropped Friday after a late selloff into the month-end, with the benchmark 10-year yield around 3.82%.
The S&P 500 closed the day 1.51% lower, making for a monthly drop of 9.3%, the sharpest monthly fall since March 2020. The Dow Jones Industrial Average slipped 1.71% on Friday, while the Nasdaq Composite (CCMPDL) slid 1,51%.
Fed Vice Chair Lael Brainard briefly assuaged concerns on Friday after she acknowledged the need to monitor the impact rising borrowing costs could have on global-market stability. But markets continued to be on the edge as investors contended with continued strength in personal consumption expenditure, one of the Fed’s preferred inflation gauges.
Risk assets have been in a tailspin since the central bank delivered a third jumbo hike last week and officials repeatedly warned of more pain to come. UK markets added to the stress this week, after the government unveiled sweeping tax cuts that threatened to exacerbate inflationary pressures, and the Bank of England attempted to manage the mayhem that ensued.
Investors are now awaiting jobs data next week for further clues about the Fed’s rate-hike trajectory. Upcoming inflation and GDP readings will also provide details on whether price pressures are easing meaningfully. All eyes will be on the earnings season, which starts next month, for insight into how companies are managing through headwinds that include a strong dollar, rising expenses and slowing demand. Fears of a global recession are still mounting as the threat of higher rates saps growth.
“Investors are eager and nervous to realize how dovish or hawkish global central banks become as tighter financial conditions and higher interest rates weaken economic performance and threaten financial stability,” said José Torres, senior economist at Interactive Brokers.
Geopolitical tensions also continued to simmer as Vladimir Putin vowed his annexation of four occupied regions in Ukraine is irreversible and President Joe Biden declared that a massive leak from the Nord Stream gas pipeline system in the Baltic Sea was an intentional act.
On the currency markets, the Bloomberg Dollar Spot Index rose 0.2%, the euro fell 0.1% to $0.9804, the British pound rose 0.4% to $1.1156 and the Japanese yen fell 0.2% to 144.78 per dollar.
🔑 Key events of the day:
Oil prices closed with their first quarterly loss since March 2020, when the market was convulsed by shutdowns caused by Covid-19 and the breakdown of talks between Russia and OPEC.
This year, investors have been impacted by the war in Ukraine and the outlook for an already tight market, which is now struggling with expectations that slower economic growth will impact crude demand.
The two main benchmarks, WTI and Brent, closed the quarter down more than 20% and are already well below the high of $127, which was set after the Russian invasion in Ukraine.
The market will now be looking ahead to the next OPEC+ meeting after reports that the group of countries is discussing plans for a production cut.
“Oil will be tighter in winter and, now that most of the crude demand destruction has been discounted, prices should stabilize heading into the end of the year,” Edward Moya, an analyst at Oanda, said.
🍝 For the dinner table debate:
In the midst of the legal process in which Twitter Inc. (TWTR) is embroiled against billionaire Elon Musk, after pulling out of the deal to buy the company last July, documents surfaced that bring together different conversations between senior executives of the social network in the midst of negotiations.
The court documents made public Thursday outline conversations between Musk, former Twitter CEO Jack Dorsey, and the social network’s current CEO, Parag Agrawal.
The messages show Musk’s early intentions to acquire the social network, to propose an open source platform and the conflicts that generated some of his ideas. Other messages even reflect the backing of business leaders and political figures for the tycoon’s acquisition.
The chats between Musk and Agrawal contain more revelations about his thinking and position regarding the company. The billionaire accepted that he “hates doing management stuff”, i.e. company management, despite being the head of Tesla (TSLA) and SpaceX, adding that he loves “solving technical/product design problems”.
-- Carlos Rodríguez Salcedo, a content producer at Bloomberg Línea, and Peyton Forte, Vildana Hajric and Isabelle Lee of Bloomberg News, contributed to this report.
