Colombia’s COLCAP Heads LatAm Gains; S&P 500 Sees Sharpest Hike Since June

Latin America’s markets caught the wave of optimism from the US, where a more positive investor mood buoyed the markets

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By Bloomberg Línea and Bloomberg News
July 19, 2022 | 07:20 PM
Reading time: 4 min.

A roundup of Tuesday’s stock market results from across the region

🥇 Colombia’s COLCAP, Latin America’s Leader:

Latin American stock markets extended the rebound they experienced on Monday, as the fears that hit the markets last week dissipated.

The increase in the price of the main commodities, such as oil and copper, and the global weakness of the dollar helped the region’s stock markets to perform well.

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Gains were led by Colombia’s Colcap (COLCAP), which benefited from increases in the shares of Promigas (PROMIG), Bancolombia’s preferred stock and Ecopetrol (ECOPETL).

It was followed by Argentina’s Merval (MERVAL), despite the fact that beyond external factors, analysts insist that the stock market’s movement is usually more related to the appreciation of the exchange rate. Both the ‘Contado con Liquidación’ - which companies access to obtain dollars by buying and selling shares or debt securities - and the so-called blue dollar registered record highs on Tuesday.

Brazil’s Ibovespa (IBOV) also performed well, with the market attentive to Petrobras’ (PETR3; PETR4) decision to reduce the price of a liter of gasoline for distributors, in a measure that will take effect Wednesday.

The Mexican stock market recovered and also accompanied the gains. The S&P BMV/IPC (MEXBOL) closed with an increase of 0.72%.

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🗽 On Wall Street:

US shares enjoyed their biggest jump since June on Tuesday, the Nasdaq 100 climbing 3.1%, with Netflix Inc. shares surging post-market on a smaller-than-expected subscriber loss.

The Dow Jones Industrial gained 2.43%, while the Nasdaq Composite (CCMPDL) climbed 3.11%.

A dollar gauge has shed more than 1% over three days, underscoring waning haven demand for the greenback and the brighter mood in markets. A decline in Treasuries took the 10-year yield back above 3%.

The euro held around a two-week high against the dollar on the possibility of a bigger-than-expected European Central Bank interest-rate hike Thursday.

An index of Chinese shares traded in the US edged up following a report that Beijing is preparing to hand down a fine of more than $1 billion to Didi Global Inc. before wrapping up a year-long probe into the ride-hailing giant. Concerns remain about China’s wider crackdown on the tech sector.

Shares of Hasbro (HAS), the largest toymaker in the US, rose after its earnings exceeded analysts’ expectations.

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“Earnings, so far, have been a little cautious and expectations have been lowered a little bit, but I don’t think worst-case scenarios are in play anymore,” Shawn Cruz, chief trading strategist at TD Ameritrade, said in an interview with Bloomberg.

Earnings reports due this week include those of Tesla.

Speculation that corporate earnings will hold up and that the Federal Reserve will avoid very aggressive monetary tightening appears to be giving investors some comfort.

“Stocks have been beaten down,” Kristina Hooper, chief global market strategist at Invesco, wrote in a note. “That doesn’t mean we won’t see more downside for some stock markets around the world, especially given that earnings expectations are likely to be adjusted downward. But I believe we are far closer to the bottom than the top.”

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In Europe, Gazprom PJSC is poised to restart gas exports through its Nord Stream pipeline to Europe on Thursday at reduced capacity, as the continent braces for shortages amid the war in Ukraine.

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Elsewhere, oil rebounded, with crude above $104 a barrel, while a rally in cryptocurrencies took Bitcoin above $23,000 and out of a one-month-old trading range.

In the currency markets, the Bloomberg Dollar Spot Index fell 0.5%, while the euro was at $1.0229, the Japanese yen was little changed at 138.19 per dollar, and the offshore yuan was at 6.7452 per dollar.

🔑 The Day’s Key Events:

Netflix (NFLX) results were better than the company anticipated and during the second quarter it lost 970,000 users, less than the two million it had projected in March.

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The good performance was largely due to the premiere of the latest season of ‘Stranger Things,’ the service’s most popular English-language series.

The company added that its share of total US TV viewing reached an all-time high in June at 7.7%.

“Our challenge and opportunity is to accelerate our revenue and membership growth by continuing to improve our product, content and marketing as we have for the past 25 years, and to better monetize our large audience,” the company said in a letter to shareholders.

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For the second quarter, revenue grew 8.6% to $7.97 billion, the report added. The company’s shares on Wall Street rose as much as 12% in after-market trading.

🍝 For the Dinner Table Debate:

Twitter (TWTR) won the first court battle against Elon Musk after the judge in the case, Kathaleen St. J. McCormick, ruled that the process should begin in October, a move that the entrepreneur’s lawyers had previously described as unfair.

Musk’s legal team had criticized Twitter’s decision to pursue a trial at “supersonic speeds” after the company brought the case in Delaware courts following the entrepreneur’s announcement that he was scrapping his initial offer.

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The case requires “forensic analysis and analysis of vast amounts of data,” Musk’s lawyers said in their filing, in which they called for trial to begin in February 2023 or later.

According to their version, the social network breached the terms of the purchase agreement by failing to provide detailed information about the spam accounts, Bloomberg reported.

The social network’s legal team has responded that they only need four days to prove that Musk must honor the agreement, which involves paying $54.20 for each share of the company’s stock which would bring the deal to around $44 billion.

-- Carlos Rodríguez Salcedo, a content producer for Bloomberg Línea, and Andreea Papuc of Bloomberg News, contributed to this report