:quality(75)/cloudfront-us-east-1.images.arcpublishing.com/bloomberglinea/I22XLV6RVRFUHH5JTFYIEIRGK4.jpg "Stock activity on an electronic board at the Brasil Bolsa Balcao (B3) stock exchange. Photographer: Patricia Monteiro/Bloomberg")
A roundup of Wednesday’s stock market results from across the region
👑 Brazil’s Ibovespa leads LatAm gains:
Brazil’s Ibovespa (IBOV) led the gains in Latin America on Wednesday, with the region’s markets closing mixed. The Brazilian index climbed 1.62%, boosted by the shares of Vale (VALE3), which rose 2.18%, and of Hapvida (HAPV3), MRV (MRVE3) and Grupo Natura (NTCO3).
Brazil’s Finance Minister Fernando Haddad said Wednesday that the government intends to bring forward to March the presentation of the draft of the new fiscal framework that should replace the spending cap rule. The minister also expressed his support for demanding and rigorous fiscal targets to force the state to work on compliance, which brought relief to the markets.
📉 A bad day for Argentina’s Merval:
Argentina’s Merval (MERVAL) suffered the sharpest losses in Latin America, falling 1.35%, dragged down by the shares of Ternium Argentina (TXAR), Banco BBVA Argentina (BBAR) and Grupo Financiero Galicia (GGAL).
Argentina’s January inflation was 6%, which consolidates it as one of the four countries with the highest verifiable consumer price indices in the world. A large part of the increase was driven by the Food and Beverages division (up 6.8%), which has the highest weighting in the basket of products and services measured by statistics agency INDEC.
🗽On Wall Street:
US stocks closed higher and Treasuries slid as investors picked through another batch of solid economic data to find different takeaways, even as worries mounted that it would force a hawkish response from the Federal Reserve.
The S&P 500 rose 0.3% after earlier dropping more than 0.75%. The Nasdaq Composite (CCMPDL) climbed 0.92% and the Dow Jones Industrial Average 0.11%. Two-year Treasury yields held near 4.60%. The dollar advanced versus major peers.
Cisco Systems Inc. shares rose as much as 10% in late trading after it gave an upbeat revenue prediction that suggested that spending on tech infrastructure is holding up better than expected.
US retail sales in January jumped by the most in almost two years, suggesting that strong consumer spending will keep prices elevated and increase pressure on the Fed to step up its efforts to tamp down inflation. Homebuilder sentiment rose in February by the most since mid-2020, as easing mortgage rates have boosted the housing market.
The data, coming one day after the hotter-than-expected US consumer price inflation report, sent Treasury yields higher on fears of more rate hikes. Yet equity investors found encouraging news in the same reports.
“Retail sales for January were strong across the board, and together with the strong jobs report show a resilient economy,” Matt Peron, director of research at Janus Henderson Investors, wrote. “This notion is supporting the market’s current ‘Goldilocks’ mood where the economy is strong, but inflation is receding, albeit still too high.”
“The Fed will read recent activity reports as supporting plans for additional interest rate increases in the first half of this year,” Bill Adams, chief economist at Comerica Bank, wrote. “Even so, the economy is generally performing better than expected so far in 2023, and inflation’s decline slowed at the turn of the year, too.”
“Yesterday’s CPI report for January showed inflation continuing to moderate but slowly,” wrote Ed Yardeni, founder of his namesake research firm. “The new information isn’t likely to moderate Fed officials’ hawkishness, though, and doesn’t much change the economic outlook.”
The Bloomberg Dollar Spot Index rose 0.6%, more than any closing gain since Feb. 6, the euro fell 0.4% to $1.0690, the British pound slipped 1.2%, more than any closing loss since Feb. 3, and the Japanese yen fell 0.7% to 134.12 per dollar.
🍝 For the dinner table debate:
Elon Musk is closer to becoming the world’s richest person again, after losing the title to Bernard Arnault in December. This is mostly explained by Tesla Inc.’s (TSLA) 70% rise in shares this year.
However, it may take him a little longer than expected, considering that he revealed this week that he gave more than 11.5 million Tesla shares to various charities between August and December last year. That represents about $2.4 billion.
Musk has narrowed the gap with Arnault to less than $10 billion amid signs of increased demand for Tesla’s electric vehicles.
Musk now has a fortune of about $184 billion after his latest donation, according to the Bloomberg Billionaires Index. That’s down from a peak of more than $300 billion in late 2021, before he decided to buy Twitter in a leveraged buyout near the peak of the tech market, but it’s up nearly $50 billion this year.
Leidys Becerra, a content producer at Bloomberg Línea, and Isabelle Lee and Vildana Hajric of Bloomberg News, contributed to this report.
