A roundup of Wednesday’s stock market results from across the Americas
🌎 Latin American markets closed mixed:
Chile’s copper production fell more than 5% in April from the previous month and 1% less than a year ago, according to a report on Wednesday, showing that the world’s largest producer of the metal has yet to resolve recent supply swings, in a much-needed boost to a global market hit by disappointing Chinese demand.
Meanwhile, in Mexico, shares of companies in the finance and communication services sectors were the hardest hit on the day, with Industrias Peñoles S.A. (PENOLES) falling 6.99%.
The Bank of Mexico (Banxico) on Wednesday raised its growth forecast for the Mexican economy from 1.6% to 2.3% at the end of 2023. In contrast, it lowered its growth expectation for 2024 from 1.8% to 1.6%, according to the January-March Quarterly Report.
The fall in international oil prices has hit Latin American stock markets, which have considerable fiscal revenues from this raw material for their economies. On Wednesday, the WTI reference reached US$ 67.61 and the Brent reference US$ 72.66 per barrel.
🗽On Wall Street:
Stock traders trying to climb a wall of worry saw the American equity benchmark struggling to keep its monthly gain in the final trading session of May.
Not even remarks from some Federal Reserve officials hinting at a potential pause in interest-rate hikes in June were able to put the S&P 500 back in the green on Wednesday. Concerns about the global economy resurfaced, a slide in regional banks raised some eyebrows and the furious rally in big tech took a breather — with Nvidia Corp. down over 5.5% after nearly tripling in value this year.
While many on Wall Street doubt the enthusiasm for tech giants will fade any time soon, there’s been growing concern about the fact that other industries haven’t been able to catch up in a meaningful way.
The Nasdaq 100 (CCMPDL) slipped 0.63%, the S&P 500 0.61% and the Dow Jones Industrial Average 0.41%.
“Much of this year’s stock market rally has been driven by only a few technology stocks, and this is not a dynamic that is typically seen at the start of bull markets,” said Robert Schein, chief investment officer, Blanke Schein Wealth Management. “We need the participation of other sectors, and narrow market breadth is not sustainable over the long term.”
Just a few days after the S&P 500 broke above 4,200, the measure closed below the key level once again. Wednesday’s losses reduced the index’s advance in May to 0.3%. That compares with a rally of 7.6% for the Nasdaq 100, which enjoyed its longest monthly winning streak since December 2021, and the 17% surge in a gauge of megacaps like Tesla Inc. and Apple Inc.
In late trading, Salesforce Inc. slipped after the software company provided a disappointing outlook for future sales, raising concerns that its newfound focus on profit may hinder revenue growth. Nordstrom Inc. gained after the retail chain’s quarterly revenue and profit came in slightly ahead of estimates.
Fed signals possible pause to rate hikes
Equities briefly pared losses after Fed Governor Philip Jefferson signaled the central bank is inclined to keep interest rates steady at its next meeting in June to give policymakers more time to assess the economic outlook. His remarks were echoed by Philadelphia Fed President Patrick Harker, who said: “I think we can take a bit of a skip for a meeting.”
Traders also watched the latest developments in the US debt-ceiling saga. The deal struck by House Speaker Kevin McCarthy and President Joe Biden cleared a major hurdle in the House, lining the compromise legislation up for passage Wednesday night as the US quickly approaches a June 5 deadline to avert a default.
While the combination of a debt-ceiling deal and a Fed pause could propel the market higher, any strength would be short-lived as investors start pricing in lower earnings estimates, Schein noted.
“Those planning for a relief rally following the passage of the debt ceiling increase may be disappointed,” said Mark Hackett, chief of investment research at Nationwide. “The next move higher for equities will require improving data and a shift in investor confidence.”
To Jonathan Krinsky at BTIG, equities remain “extremely vulnerable” as the market heads into the last month of the quarter.
“By now, everyone is well aware of the market’s breadth problem, and we think June will show the risks when the weak remain weak, and the strong unwind lower,” Krinsky added.
In other corporate news, Hewlett Packard Enterprise Co. tumbled 7.1% after projecting revenue for the current quarter that fell short of analysts’ estimates. Advance Auto Parts Inc. plunged 35% on a bearish outlook. American Airlines Group Inc. rose 1.1% after boosting its profit forecast.
Elsewhere, the US dollar rose, making commodities priced in the currency more expensive for international investors. West Texas Intermediate crude deepened its slide below $70 a barrel. ICE Brent futures were also lower.
The Bloomberg Dollar Spot Index rose 0.1%, the euro fell 0.4% to $1.0690, the British pound rose 0.2% to $1.2440 and the Japanese yen rose 0.3% to 139.31 per dollar.
🍝 For the dinner table debate:
Elon Musk became the world’s richest person again on Wednesday, overtaking luxury tycoon Bernard Arnault after shares of LVMH, a company he founded, fell 2.6% in Paris.
Musk and Arnault, 74, have been neck-and-neck in the fight for the top spot on Bloomberg’s Billionaires Index, a list that compiles the world’s 500 richest people.
Arnault had first overtaken Musk in December, as the technology industry faced difficulties and the luxury sector showed resilience in the face of inflation. LVMH, which was founded by Arnault, owns brands such as Louis Vuitton, Fendi and Hennessy.
Musk’s fortune is now valued at about $192.3 billion, according to the index, while Arnault’s is around $186.6 billion.
Sebastián Osorio Idárraga, a content producer at Bloomberg Línea, and Rita Nazareth of Bloomberg News, contributed to this report.