Brazil’s Ibovespa Leads LatAm Market Gains; Tech Shares Push NYSE Higher

¡Buenas tardes! OsoToro te trae el resumen diario del cierre de los mercados

🌎 Brazil’s Ibovespa posts LatAm’s highest gains:

In general, Latin American stock markets closed a good week, with some indices posting strong gains. This was the case of Argentina’s Merval (MERVAL), which in the last five days recorded a rise of 8.17%, followed by Brazil’s Ibovespa (IBOV), which rose by 5.84% in the same period. The Ibovespa also closed this Friday as the best performing stock exchange of the session, surpassing the gains of even the NYSE.

In third place is the Colombian stock exchange (COLCAP), which, despite this Friday’s setback, closed the week with an appreciation of 3.14%. Colombia has been the scene of a new political crisis that plays against President Gustavo Petro, and the possibility that his reforms may be delayed has boosted the optimism of the private sector.

In addition to the Colcap, the Peruvian stock exchange (SPBLPGPT) declined the most on Friday, with a drop of 1.06%, pushed down by the shares of mining companies.

In the Ibovespa, the sectors that performed the best on Friday were energy (3.70%), communications (2.32%) and public services (2.32%). In the energy sector, Petrobras shares rose the most: Petrobras (PETR3) shares rose 4.88%, while PETR4 shares rose 4.81% on the day. Likewise, Ultrapar Participações (UGPA3) shares rose by 2.14%.

In contrast, the sectors that dragged down Peru’s Lima Stock Exchange (BVL) were materials (-2.69%), where mainly mining companies are listed, and consumer (-0.43%) and industrial (-0.38%). In the materials sector, which fell the most, the shares that fell the most were those of Buenaventura (BVN), which fell 7.39%, followed by Volcan (VOLCABC1), which fell 2.50%, and in third place, SiderPerú (SIDERC1), which fell 2.24%.

🗽On Wall Street:

The S&P 500 inched further into bull-market territory on Friday as technology shares continued to climb amid bets the Federal Reserve is nearing the end of its hiking cycle.

The benchmark index added 0.1%, as tech and megacap shares drove another session of gains, with Tesla Inc. up 4.1% after General Motors Co. announced it’s joining the company’s charging network. Netflix Inc. rose 2.6% on a report it added US subscribers after cracking down on password sharing. And Adobe Inc. gained another 3.4% amid the frenzy in stocks linked to artificial intelligence.

The S&P 500 has now surpassed a 20% gain from an October low, a common marker of a bull market, following a rise in tech stocks. However, analysts have warned the rally could stall ahead of next week’s interest-rate decisions from the Fed and the European Central Bank. Unexpected hikes from two central banks this week have raised speculation that policymakers may have to keep rates higher for longer. Meanwhile, US data pointing to a cooling labor market has supported the consensus view that the Fed is likely to pause.

“We’ve become a little uncomfortable with the tech trade,” Stuart Kaiser, head of US equity trading strategy at Citigroup, told Bloomberg TV. “There’s a scarcity of growth in the market, and the market is willing to pay a premium for that scarcity of growth.” But the debate for investors is what can get the market rally to turn “into something that is maybe a little more durable and sustainable to the upside.”

Solita Marcelli, chief investment officer Americas at UBS Global Wealth Management, also cautioned against assuming the recent upswing in equities can gain momentum.

“While many investors believe that passing this milestone puts markets in bull territory, it remains possible that we are seeing a bear market rally— a period of strong gains that occurs in the middle of a bear market,” she said. “Until markets reach a new all-time high, it’s impossible to know whether the bear market trough —the ultimate low of the market cycle — is behind us.”

“The bulls are back,” noted Edward Moya, senior market analyst for the Americas at Oanda, in a report. Moya also highlighted Tesla’s (TSLA) record earnings streak after raising its market value by $200 billion.

Elsewhere, Treasury yields rose after disappointing employment data from Canada. The country’s economy ended its eight-month run of employment gains with minor job losses in May, signaling weakness in the labor market.

Currently, swaps traders are pricing in roughly a one-third chance of a Fed hike next week, and almost 90% odds of one in July after an unexpected rate hike by the central banks of Canada and Australia this week.

In Europe, stocks edged lower after a downbeat outlook from Croda International Plc weighed on chemical shares.

Japan’s Nikkei 225 capped a ninth week of gains, up 2.4%, for its longest streak in more than five years.

And in currencies, the Turkish lira extended its decline to an all-time low against the dollar, taking its weekly drop to 10%. President Recep Tayyip Erdogan completed key appointments of the economy team, which is expected to turn to more conventional policies.

The Bloomberg Dollar Spot Index was little changed, the euro fell 0.3% to $1.0746, the British pound rose 0.2% to $1.2581 and the Japanese yen fell 0.4% to 139.42 per dollar.

🍝 For the dinner table debate:

A judge of Latino origins will hear one of the most important court cases in the United States. She is Aileen M. Cannon, who has been initially assigned to oversee the case for the handling of secret documents of former president Donald Trump, and who is no stranger to the process against the former president.

Cannon, 41, worked at the law firm Gibson Dunn (2009-2012) and also served as a federal prosecutor in the Southern District of Florida (2013-2020) before being nominated by Trump. The official was born in the Colombian city of Cali, but moved at a very young age to live in the United States, in the city of Miami, and graduated from Duke University in 2003.

Cannon is now the one who will oversee the criminal prosecution against the former U.S. president. She was nominated as district judge by Donald Trump in 2020, when he was still president of the United States.

It should be recalled that Trump was also accused in another case in a court in New York for alleged irregular payments he made to a porn actress so that she would not disclose to the public a sexual relationship between the two. This case is also in the hands of a judge of Colombian origin: Juan Merchan, judge of the Supreme Court of the State of New York, was the one who made the arraignment against the former president for the case of the alleged payments to the actress.

Paola Villar S., a content producer at Bloomberg Línea, and Carly Wanna and Isabelle Lee of Bloomberg News, contributed to this story.