A roundup of Wednesday’s stock market results from across the region
🌎 Brazil leads LatAm gains, Merval falls from months-long hgh:
Wednesday was mixed for Latin American stock exchanges. Brazil’s Ibovespa (IBOV) led the day with a variation of 0.77%, followed by Colombia’s Colcap (COLCAP), which rose 0.49%, and the Lima Stock Exchange (SPBLPGPT) posted a gain of 0.24%.
The Ibovespa was boosted by the energy (2.43%), materials (0.88%) and non-basic consumer products (0.81%) sectors. Meanwhile, the industrial (-0.85%) and communication services (-0.12%) sectors fell.
On the main index of the Colombian stock exchange, meanwhile, the sectors with the best performance during the day were non-basic consumer products (2.22%), finance (1.40%) and energy (1.28%). In contrast, the communication (-5%) and public services (-1.66%) sectors fell, with the shares of Corporación Financiera Colombiana (PFCORCOL) and Bancolombia (PFBCOLO) the best performers, up 6.75% and 5.42% respectively.
🗽On Wall Street:
A drop in tech shares drove US stocks lower, while Treasuries retreated after a surprise Bank of Canada rate increase fueled bets the Federal Reserve is not done with its own tightening.
The Nasdaq 100 fell 1.8%, with the likes of Alphabet (GOOGL) and Microsoft (MSFT) off at least 3%. It was the first drop of the past five sessions for the technology-heavy gauge. Megacap tech companies had powered the S&P 500 to the brink of a bull market before Wednesday’s pullback. The small-cap Russell 2000 added 1.8%, climbing for a second day after weeks of underperformance.
Yields on the policy-sensitive two-year rose to 4.56% as traders drove up wagers for a quarter point hike in US interest rates by July.
“You could see a little bit of a pullback because of the froth in the market,” Seema Shah, chief global strategist at Principal Asset Management, told Bloomberg Television. “If you don’t get a recession sooner, the later it is, the harder it becomes. You want to get this out of the way.”
Expectations of higher interest rates for longer, in order to combat inflation, are weighing on the tech sector. Policy decisions are due from the Federal Reserve and the European Central Bank next week, with the Fed signaling it may pause rate hikes in June before resuming them later.
“In marked contrast to the Fed, the Bank of Canada seems comfortable going into a meeting without its rate decision presignaled to the market,” said Deutsche Bank strategist Alan Ruskin.
He expects a “hawkish hold” as the more likely decision from the US central bank. “In part because of the meeting’s timing, coming both before the May labor market data, and, the Federal Reserve’s June FOMC, that favors a ‘skip’ decision,” he wrote in a note to clients.
Read more: Treasury Yields Nudging Higher Shows Fed in Pause-and-Hike Mode
Bridgewater Associates’ billionaire founder Ray Dalio said while interest rates won’t go much higher, the economy will get worse.
“We are at the beginning of a late, big-cycle debt crisis when you are producing too much debt and have a shortage of buyers,” Dalio said from the Bloomberg Invest conference in New York.
In currency markets, Turkey’s lira slumped about 7% to a record low against the dollar amid increasing signs that policymakers may be scaling back interventions to support the currency. President Recep Tayyip Erdogan’s appointment of former Merrill Lynch strategist Mehmet Simsek as his new Treasury and finance minister has sparked expectations of a return to more orthodox monetary policy and raised the prospect of reduced intervention in markets.
The Bloomberg Dollar Spot Index was little changed, the euro was little changed at $1.0695, the British pound was little changed at $1.2432 and the Japanese yen fell 0.4% to 140.22 per dollar.
Elsewhere, gold tumbled. Bitcoin slid in the wake of a sweeping crackdown by US regulators. And oil gained, driving energy shares higher.
🍝 For the dinner table debate:
Lionel Messi, Latin America’s star player, will continue his career at Inter Miami of the US Major League Soccer (MLS), after the Argentine striker rejected an offer from a Saudi Arabian club with a salary of $400 million per year.
In an interview with Spanish media Mundo Deportivo, Messi said that the deal is not 100% closed but clarified that talks are advanced. So far, Inter Miami, a club co-owned by former English footballer David Beckam, has not responded to requests for comment on the matter.
According to The Athletic, Messi has also been offered a deal that would give him benefits with Adidas and Apple; and at the same time, according to ESPN, a participation of the Argentine player in Inter Miami is being finalized.
At the age of 35, Messi would be closing this deal to play for the first time outside Europe.
The world champion played as a teenager for Barcelona before moving to Paris Saint-Germain in 2021.