A roundup of Wednesday’s stock market results from across the Americas
🌎 Brazil’s Ibovespa leads the gains in Latin America:
The Argentine Merval (MERVAL) and the Colombian stock exchange (COLCAP) closed with losses on Wednesday, while the rest of the region’s markets gained. The Brazilian Ibovespa (IBOV) climbed 1.99% and Mexico’s stock exchange index (MEXBOL) rose 1.05% during the day.
On the Merval, the shares that fell the most were those of Termium Argentina (TXAR), Aluar (ALUA) and Transener (TRAN). while the Colombian stocks slipping lower were in the public services (-1.91%) and finance (-0.49%) sectors. Shares of Compañía Colombiana de Inversión (CELSIA) dropped 2.81%; Cementos Argos (CEMARGOS) 2.47% and Interconexión Eléctrica (ISA) 2.47%.
On Brazil’s Ibovespa, the sectors with the strongest results were health (4.11%), energy (3.69%) and communications (3.32%).
🗽On Wall Street:
The relentless rally in US stocks lost some traction on Wednesday as the Federal Reserve signaled interest-rate hikes are still on the table after pausing its tightening cycle in June to assess economic conditions.
Following the usual whirlwind of Fed days, the S&P 500 closed with a gain of only 0.1%. The small move drove the gauge to its fifth straight advance, the longest winning run since November 2021. Equities recovered some ground amid a rebound in big tech and as Jerome Powell said no decision has been made for the next few meetings.
“The Fed may have paused today, as expected, but they probably raised a few eyebrows with their hawkish language,” said Mike Loewengart, head of model portfolio construction at Morgan Stanley Global Investment Office. “The inflation battle was always slated to be a long one, and there’s likely to be more bumps in the road for the market.”
Powell also said nearly all Fed officials expect it will be appropriate to raise interest rates “somewhat further” in 2023 to bring down inflation. “Not a single person on the committee wrote down a rate cut this year, nor do I think it is at all likely to be appropriate,” he noted, suggesting that such a decision would be a couple of years out.
“The Fed is taking a breather. But it will likely be very short-lived, with rate hikes potentially resuming as soon as July. For now, the Fed will use this time to take in more data on inflation, the health of the economy, and tightening credit conditions before deciding what comes next,” according to Greg McBride at Bankrate.
Bond traders are nearly wiping out bets that the Fed will lower interest rates this year. Rates on swap contracts referencing future Fed policy meetings reflect a peak rate of about 5.3% in September after the central bank’s decision, while the December contract’s rate jumped to about 5.2%.
The Fed decision left the benchmark federal funds rate in a target range of 5% to 5.25%. Fresh quarterly Fed forecasts showed borrowing costs rising to 5.6% by year end, according to the median projection, compared with 5.1% in the previous round of projections.
Treasury two-year yields, which are more sensitive to imminent Fed moves, climbed two basis points to 4.69%. The dollar remained near a one-month low.
In corporate news, Advanced Micro Devices Inc. rallied as the chipmaker showed off its planned line of artificial intelligence processors. Nvidia Corp. hit an all-time high, extending this year’s surge. Tesla Inc. fell, snapping its record-setting 13-day winning streak. UnitedHealth Group Inc. slumped after an executive said a recent increase in surgeries and other medical care might push expenses higher than anticipated.En un día clave para la política monetaria global,
As for currencies, the Bloomberg Dollar Spot Index fell 0.2%, the euro rose 0.3% to $1.0825, the British pound rose 0.4% to $1.2659 and the Japanese yen rose 0.2% to 139.97 per dollar.
🍝 For the dinner table debate:
The world’s largest online search engine remains in the crosshairs of European regulators: this time the European Union has accused Google of anti-competitive behavior and leveraging its dominant position in the ad tech sector to stifle competition, with one official stating that Google had prioritized its own ad exchange program over competitors.
Margrethe Vestager, the EU’s competition commissioner, believed that this was how the company consolidated its control over the ad tech supply chain. She added that this allowed it to charge high fees for its services.
Vestager also mentioned at a press conference that if Google is found to have acted illegally, it could be required to divest part of its ad sales services.
The new statement of objections follows three previous EU cases against Google, as the technology company has accumulated penalties of more than US$8.6 billion to date. Some cases being pursued against Google from the EU date back to 2017 for abuses of dominance in its mobile operating system, its search business and its display advertising operations. For its part, Google defends its innocence in the cases charged.
Paola Villar S., a content producer at Bloomberg Línea, and Rita Nazareth of Bloomberg News, contributed to this story.