A roundup of Thursday’s stock market results from across the region
👑 Latin America’s Leader
Volatility continues to rattle the Colombian stock market, but which was the only one in Latin America to close with gains on Thursday, with the COLCAP rebounding 0.66% after Wednesday’s 2.51% drop, boosted by the utilities and raw materials sectors.
Grupo Energia Bogota (GEB) shares were among the best performers, rising by over 6%.
However, investors are attentive to the results of the second round of the presidential election to be held this Sunday, in which Gustavo Petro and Rodolfo Hernández will face off.
📉 A Bad Day:
With the exception of Colombia, the possibility of an economic recession also weighed on the other Latin American markets, which saw a day of losses, impacted by the international mood.
Chile’s IPSA (IPSA) was among the most affected in the region and closed with a fall of more than 2%, dragged down by the raw materials, industrial and non-basic consumer goods sectors.
Rodrigo Castillo, CEO of BeFX, told Bloomberg Línea that the US rate hike is a strong and clear signal that inflation is very high and could be a big problem for both the US and the global economy.
Mexico’s bourse also closed with losses, the S&P BMV/IPC (MEXBOL) index dropping more than 1.5%.
“The Fed’s decision has generated a major period of volatility, amid greater expectations of a recession in the US. In addition, expectations for the close of the year point to slower economic growth and greater inflationary pressure,” Monex analysts said.
Brazil’s Ibovespa (IBOV) remained closed for a holiday Thursday.
🗽 On Wall Street:
US contracts stabilized after the S&P 500 closed down 3.25% to its lowest since December 2020 on Thursday, and the tech-heavy Nasdaq 100 shed 4%.
Treasuries caught a bid, supported by some soft US data including housing starts and building permits, lowering the 10-year yield to about 3.20%. Bitcoin (XBT) fell below $21,000 in its longest slide in Bloomberg data going back to 2010.
The dollar, meanwhile, posted its biggest two-day drop since March 2020 as European central banks stepped up monetary tightening, heralding a narrower gap between rates there and in the US.
The Nasdaq Composite (CCMPDL) dropped 4.08% and the Dow Jones Industrials slipped 2.42%.
🔑 The Day’s Key Events:
Oil prices rose on Thursday following Wednesday’s setback, although the WTI and Brent benchmarks remain below $120 per bareel. Supply problems weighed more on investors than fears of a possible economic recession.
The International Energy Agency (IEA) said it sees problems for the market to meet demand, in its first assessment of projections for 2023.
According to the IEA’s analysis, although consumption will rebound with the reactivation of the Chinese economy, affected this year by the lockdowns imposed to curb the spread of Covid-19, the sanctions against Russia will end up reducing oil production.
In 2023, global demand growth is expected to accelerate to 2.2 million barrels per day, while non-OPEC+ supplies will expand by 1.9 million per day, Bloomberg reported.
🍝 For the Dinner Table Debate:
Elon Musk met for the first time with Twitter (TWTR) employees since launching his $44 billion takeover bid for the company, and told them that one of his goals is for the social network to reach one billion users, according to Bloomberg.
To achieve this, he proposed options such as a subscription model or charging users who are interested in verifying their accounts. In addition, Bloomberg added, Musk spoke of the importance of advertising within the business model.
In his speech, he raised the possibility that users could say “pretty outrageous things”, although he clarified that a balance is needed for people to “feel comfortable” on the social network.
Musk also did not rule out layoffs, arguing that the company needs to “get healthy”. “Anyone who is an important contributor should have nothing to worry about”, he was quoted by Bloomberg as saying.
-- Carlos Rodríguez Salcedo, a content producer for Bloomberg Línea, and Sunil Jagtiani, of Bloomberg News, contributed to this report