:quality(75)/cloudfront-us-east-1.images.arcpublishing.com/bloomberglinea/XIJFDH6UKBAODPFWRMC3YSCDDQ.jpg "Latin American markets closed with gains on Monday.")
A roundup of Monday’s stock market results from across the Americas
👑 Latin American markets close higher:
Latin American stock markets closed in the green at the start of the week and trimmed part of the previous week’s losses, with Argentina’s Merval (MERVAL) leading the gains and rising 2.34%, on optimism spread after the Argentine national team won the Qatar 2022 FIFA World Cup.
Shares of Pampa Energía S.A. (PAMP) and YPF S.A. (YPFD) rose 6.9% and 5.8% during the day as the country prepares to receive the World Cup-winning team on Tuesday, which will be a public holiday.
Brazil’s Ibovespa (IBOV) also stood out on Monday, gaining 1.83%, driven by consumer staples and information technology stocks.
The Supreme Court declared the secret budget unconstitutional on Monday, by five votes to five, a factor that helped the index to recover part of its losses.
Chile’s Ipsa (IPSA) also performed well at the beginning of the week, registering gains of 0.89%. The shares of Sonda S.A. (SONDA) and Engie Energía Chile S.A. (ECL), rose 5.04% and 3.90%, respectively.
The value of Chilean bonds held by foreign investors increased from $7.17 billion in September to $8.18 billion in October, according to the most recent data from the Central Bank on Monday. It was the highest pace of purchases in 15 months and the first net inflow of capital since May.
Mexico’s S&P/BMV IPC (MEXBOL), meanwhile, gained 0.64% on Monday; Colombia’s Colcap (COLCAP) advanced 0.32%; and Peru’s S&P/BVL (SPBLPGPT) saw a slight gain of 0.01%, amid the ongoing political crisis in the country.
🗽 On Wall Street:
US stocks dropped for a fourth session as traders assessed the Federal Reserve’s path next year after central bank officials vowed to keep raising rates until they’re confident inflation is coming down meaningfully.
The S&P 500 closed at its lowest level in more than a month, dragged by declines in big-tech firms including Apple Inc., Microsoft Corp. and Amazon.com Inc. The tech-heavy Nasdaq 100 slid 1.4%. Walt Disney Co. ended Monday’s session at its lowest since March 2020 after a somewhat disappointing opening weekend for the company’s Avatar: The Way of Water.
The Nasdaq Composite (CCMPDL) closed with the deepest losses, down 1.49% at closing, while the S&P 500 dropped 0.90% and the Dow Jones Industrial Average dropped 0.49%.
Treasuries fell, led by longer-dated securities, as traders speculated about the potential for a hawkish pivot from the Bank of Japan. The benchmark 10-year yield rose the most since October. The dollar wavered as investors mulled the Fed’s rate outlook ahead of fresh economic data this week.
Investors are still on the edge after recent remarks from the Fed and other hawkish central banks across the globe. Risk assets have taken a hit since US policymakers last week signaled a peak rate that was above market expectations.
Sentiment remained sour after former New York Fed President and Bloomberg Opinion columnist William Dudley told Bloomberg Television on Monday that optimistic markets would only make the central bank tighten even more. European Central Bank Governing Council Member and Bundesbank President Joachim Nagel saying it will take some time until inflation slows to the central bank’s 2% target also dampened the mood on Monday.
“Those who were in the camp of a year-end rally are now second-guessing their investment thesis,” wrote JC O’Hara, chief market technician at MKM Partners. “The markets may have placed a little too much faith in Santa Claus and the rally he typically brings.”
But some investors are looking past fears of an economic recession triggered by higher interest rates, and are betting instead that inflation might be peaking, which would allow the Fed and its peers some leeway in their tightening policy.
“I’m kind of more in the camp of they hike in February, and I do think they’ll hike again in March, but that’s probably it,” Matt Brill, head of US investment-grade and senior portfolio manager at Invesco, said on Bloomberg Television. “We’re 90%-95% of the way done here. I think the floor has sort of been set and the worst is certainly behind us.”
Meanwhile, US homebuilder sentiment sank in December to a level not seen in over a decade outside of the pandemic, amid high mortgage rates and construction costs.
A handful of major companies with poor results last quarter — including FedEx Corp. and Nike Inc. — will be reporting earnings in coming days. Investors will be closely watching what executives at these companies say about the outlook for their respective industries amid a tough macro backdrop.
Earlier, global equity investors were somewhat heartened by a vow from China’s top leaders to boost the economy next year by reviving consumption and supporting the private sector.
On the currency markets, the Bloomberg Dollar Spot Index was little changed, the euro rose 0.2% to $1.0604, the British pound was little changed at $1.2144 and the Japanese yen fell 0.3% to 137.01 per dollar.
🔑 The day’s key events:
Oil prices rose at the beginning of the week as China continues to signal a greater opening of its economy, which would boost demand for crude oil, while markets are moving away from risky assets due to the sustained increase in interest rates.
WTI crude oil rose 1.21% to $75.19 per barrel and Brent crude oil gained 1.45% to $80.19 per barrel.
Investors in the crude market saw Chinese President Xi Jinping’s pledge to focus on the economy as supporting energy demand even as Covid cases mount and the country’s economic reopening becomes bumpy, Bloomberg said.
For Rebecca Babin, senior energy trader at CIBC Private Wealth Management, it was a day of “fragile trading (...) At the end of the day, conviction to buy on the dip remains quite low.”
🍝 For the dinner table debate:
The wage gap between Latinos in the US and non-Hispanic White US citizens widens even further if the comparison is limited to women only. According to the National Womens’ Law Center, Latinas have to work twice as hard to receive the pay of a non-Hispanic white worker for the same type of work. In other words, what a white man earns in 12 months will take a Latina woman 24 months.
The most recent data are from 2021 and indicate that Latinas working full time year-round were paid only 57 cents for every dollar earned by non-Hispanic white men. Thus, women miss out on $2,477 per month.
:quality(75)/cloudfront-us-east-1.images.arcpublishing.com/bloomberglinea/IJG2CHLGXREKZKK2AV5CDTBDQQ.jpeg "Latinas In US Earned 50% Less than Non-Hispanic White Men In 2021")
According to the survey, the unemployment rate for Latinas age 20 and older reached 20.1% in April 2020 and was in the double digits for six months in 2020. Thus, the labor force participation rate for Latinas remains below pre-pandemic levels.
Nearly one in five unemployed Latinas (19.1%) have been unemployed for six months or more, and more than one in eight Latinas who work part-time (12.9%) do so involuntarily, unable to work full-time.
Leidys Becerra, a content producer at Bloomberg Línea, and Peyton Forte and Vildana Hajric of Bloomberg News, contributed to this report.
