Bloomberg Línea — A roundup of Friday’s stock market results from across the region.
🥇 The Leader:
Argentina’s stock market outperformed the U.S. markets and posted the highest growth in Latin America for the second straight day.
Argentina’s MERVAL closed with a 1.64% gain and, although it outperformed during the day, analysts insist that its performance in local currency is influenced by what happens with the exchange rate.
According to Ayelén Romero, an analyst at Rava Bursátil, the volume and uncertainty surrounding the country’s exchange rates reflect in the index’s increases.
Within this context, the shares of Grupo Supervielle (SUPV), Bolsa y Mercados Argentinos (BYMA), and Edenor (EDN) had the best performance.
Driven by a number of factors, including the Argentine peso debt crisis, the surge in currency emission, and the sudden departure of Martin Guzmán from the Cabinet, the sky is the limit for the parallel exchange rate in Argentina.
🗽 On Wall Street:
US stocks fell as disappointing results from social-media firms and weak economic data added to recession fears. Treasuries rallied as traders dialed back bets on Federal Reserve hikes, while the dollar retreated.
The S&P 500 dropped for the first time in four days, while the tech-heavy Nasdaq 100 underperformed major benchmarks, closing down 1.8%. Snap Inc.’s (SNAP) poor results and Twitter Inc.’s (TWTR) sales miss raised concern about online ad spending and weighed on shares of Facebook parent Meta Platforms Inc. (META) and Google owner Alphabet Inc. (GOOG) Hardware and storage companies including Micron Technology Inc. (MU) and Western Digital Corp. (WDU) fell after Seagate Technology Plc’s (STX) earnings miss and weak outlook.
Despite Friday’s churn, the equity market posted its best week in a month, paring this year’s market rout to about 17%. Speculation that the worst of the selloff has passed is partly behind the move. But angst about the damage from inflation, rapidly rising interest rates and recession fears is proving hard to shake despite a tempering in expectations for Fed aggressiveness next week.
“The Fed meeting is crucial,” Quincy Krosby, chief global strategist at LPL Financial, said by phone. “Does the Fed rhetoric become less hawkish? Because what the market may be expecting that the Fed goes into the summer months and comes out perhaps a little bit less hawkish. But it’s a question mark because it depends on the trajectory of inflation.”
🔑 The Day’s Key Events:
Global inflation could get a break after an agreement was reached between Russia and Ukraine to release millions of tons of grain stranded in Ukrainian Black Sea ports.
Government officials from Kiev and Moscow signed side agreements with Turkey and the United Nations at a meeting in Istanbul, Bloomberg reported. The traffic of grain ships should begin in the next few days, Turkish President Recep Tayyip Erdogan said.
“This is an unprecedented agreement between two parties involved in a bloody conflict,” added UN Secretary-General Antonio Guterres.
Ports involved accounted for just over half of Ukrainian grain exports by sea in the 2020-21 season, according to UkrAgroConsult data compiled by Bloomberg.
Ukraine is one of the world’s largest exporters of wheat, corn, and vegetable oils, with the war driving food prices up around the world.
📉 At the end of a bad day:
The poor performance of the stock markets in the U.S. impacted the performance of Latin America’s stock markets. The Colombian stock market, for the second consecutive day, closed with the worst performance and the COLCAP recorded a fall of more than 2%.
Shares of Grupo Nutresa (NUTRESA), Grupo Bolívar (GRUPOBOL) and Grupo Energía Bogotá (GEB) were among the worst performers. Ecopetrol (ECOPETL) shares fell more than 3% in line with the drop in oil prices.
Brazil’s Ibovespa (IBOV) and Mexico’s S&P BMV/IPC (MEXBOL), also saw their numbers in red, following Wall Street’s downward movement after disappointing results from social networking companies.
Weak economic data also increased fears of a US recession.
🍝 For the dinner table debate:
A World Cup in South America appears to be taking shape with Uruguay, Argentina, Chile and Paraguay’s bid to host FIFA’s top event in 2030.
Uruguay’s presidency and the country’s football association (AUF) are preparing for the first operational meeting on August 2 at the Centenario Stadium in Montevideo, sources familiar with the matter told Bloomberg Línea.
While details on the meeting’s agenda are pending, the people consulted by Bloomberg Línea said that parties involved expect the participation of authorities from the sports ministries of each country, as well as representatives of the soccer associations.
Organizers are also seeking to bring into the working group international consultants who have collaborated in the organization of other World Cups, such as the next one to be held jointly by the U.S., Canada and Mexico in 2026.
This edition of the World Cup, which would mark the centenary of the first one held in 1930 in Uruguay, still faces doubts as to how it could be financed.