A roundup of Tuesday’s stock market results from across the Americas
👑 Peru leads in Latin America:
Peru ended the day with the sharpest gains in Latin America on Tuesday, the S&P/BVL Perú (SPBLPGPT) closed 0.85% higher, buoyed by the financial, raw materials and basic consumer sectors, with the shares of Credicorp Ltd (BAP), Minsur SA (MINSURI1) and Southern Copper Corp (SCCO) leading the gains.
Colombia’s Colcap (COLCAP) was the only other index in the region to close higher, climbing just 0.18%, buoyed by the shares of Organización Terpel SA (TERPEL), Grupo Aval Acciones y Valores (PFAVAL) and Grupo Nutresa (NUTRESA).
Banco de Bogotá announced Tuesday that its board of directors has authorized the acceptance of the offer of purchase of 4.11% of the shares it holds in BAC Holding International Corp (BHI), presented by Endor Capital Assets. The offer is subject to regulatory requirements. The proposal had been announced on March 1.
BAC Holding International Corp, which is incorporated under the Corporations Law of the Republic of Panama, is a company with administrative headquarters in Colombia and dedicated to investment activities in Colombia and Panama, as well as holding shares of other entities of the banking sector, among them BAC Credomatic.
The latter holding company has more than 4.3 million customers and more than 19,000 employees in the region.
📉 A bad day for Argentina’s Merval:
Argentina’s Merval index (MERVAL) saw the sharpest slump in the region, falling 2.12%, dragged down by the shares of Sociedad Comercial del Plata (COME), Grupo Supervielle (SUPV) and Banco de Valores SA (VALO).
Inflation in Argentina climbed again in February, to 6.6%, up from 6% in January and 5.1% in December, bringing it to an accumulated 102.5% in the previous 12 months, according to data released by the country’s statistics agency INDEC.
Inflation for the first two months of 2023 was 13.1%.
The sector with the highest inflation in February was food and non-alcoholic beverages (9.8%), mainly due to the increase in meat and milk, dairy products and eggs, according to the report, and exceeded the expectations of the economists consulted by Bloomberg Línea.
After the data update, Argentina is now one of the countries with more than 100% inflation from one year to the next, along with Venezuela, whose year-on-year inflation as of February climbed to 537.7%; and Lebanon, with 124% year-on-year inflation based on January data.
🗽On Wall Street:
US stocks rallied into the close as traders wagered the worst of the banking turmoil has passed. Treasuries fell.
The S&P 500 recovered much of its lost gains in the late afternoon session after a Russian fighter jet colliding with a US drone tamped down the initial enthusiasm. The tech-heavy Nasdaq notched its biggest one-day gain in six weeks.
The relief rally in banking stocks was crimped as the KBW Bank Index ended the day with a 3.2% gain. Remarks from ratings companies on the financial sector underscored the fragile sentiment as markets were jolted by the biggest American bank failures since the financial crisis.
Moody’s Investors Service cut its outlook on the sector on the heels of the trio of banking collapses over the past few days. First Republic Bank triggered a volatility halt after S&P Global Ratings placing the company on watch negative.
The two-year Treasury yield climbed to 4.3%— following a three-day swoon that was the biggest in decades amid the tumult — after data showed inflation remained elevated in February. Swaps traders once again expect the Fed to lift rates by a quarter percentage point. Odds of an increase had slipped to nearly 50-50 on Monday.
US consumer prices rose 0.4% in February, meeting economists’ forecast. The closely watched core CPI number — which excludes food and energy — increased 0.5%, just ahead of the median estimate of 0.4%.
“The market is indecisive right now. It’s completely undecided on which way we’re supposed to go,” said Liz Young, head of investment strategy at SoFi. “At the end of yesterday it tried to price in what it thought CPI was gonna do and then CPI came in. It’s like we’re not sure what’s good and what’s bad anymore. And we’re stuck in this purgatory.”
Tom Essaye, a former Merrill Lynch trader who founded “The Sevens Report” newsletter, expects that the data will keep the Fed on track to raise rates 25 basis points next week.
“Given the bank troubles, this report isn’t bad enough to put 50 bps back on the table, but if the Fed wants to maintain credibility on inflation, then this report says they have to hike again next week and not signal they are done,” Essaye wrote.
“Overall, this is an inflation update that, taken as a sole input, would suggest that a 25 bp hike next week is a foregone conclusion,” said Ian Lyngen, rates strategist at BMO Capital Markets. “Alas, the regional banking stress leaves next week’s decision as a wild card until there is greater clarity on the success of limiting the contagion to the rest of the banking sector from SVB/Signature.”
Elsewhere in markets, oil extended declines. Gold slid after rising in the three previous sessions as traders turned to haven assets.
On the currency markets, the Bloomberg Dollar Spot Index fell 0.1%, the euro was little changed at $1.0741, the British pound was little changed at $1.2178 and the Japanese yen fell 0.7% to 134.15 per dollar.
🍝For the dinner table debate:
After weeks of anticipation, Google (GOOG) unveiled Tuesday new features of its generative artificial intelligence to compete with OpenAI’s ChatGPT, which has Microsoft (MSFT) as one of its main investors.
The technology will be used by developers and for Google Workspace services in activities ranging from customizing texts through Sheets, asking the AI to make a slideshow presentation on a topic to transcribing and summarizing meetings in Google Meets, among others.
In a presentation to the press, Google Cloud CEO Thomas Kurian said that Google had already been using and investing in generative AI for years (such as auto-complete features that suggest words in Google searches or email responses). But since generative AI became popular in the market, Google announced that it is “at a turning point in AI advancements.”
“We have responsibly developed great language models to bring to our products. Now, developers and their businesses can test new applications and products to make it easier, safer and more scalable to grow with Google’s AI models through Google Cloud and a new prototype environment called MakerSuite,” Kurian said.
Leidys Becerra, a content producer at Bloomberg Línea, and Carly Wanna of Bloomberg News, contributed to this report.