:quality(75)/cloudfront-us-east-1.images.arcpublishing.com/bloomberglinea/VQJNQIY3G7Q4YVXMJSCN7NQEZM.jpg "Traders on the floor of the New York Stock Exchange (NYSE) in New York, US. Photographer: Michael Nagle/Bloomberg")
A roundup of Wednesday’s stock market results from across the Americas
👑 Peru leads in Latin America:
Latin America’s markets closed mixed on Wednesday, with gains led by Peru’s S&P/BVL (SPBLPGPT) and Mexico’s S&P/BMV IPC index (MEXBOL). Peru’s market advanced 1.99%, with shares of Compañía de Minas Buenaventura (BVN), Empresa Agroindustrial Pomalca (POMALCC1) and Unacem Corp (UNACEMC1) leading the gains.
Mexico’s IPC gained 1.29%, buoyed by the hikes by shares of Industrias Peñoles (PENOLES), Grupo Financiero Inbursa (GFINBURO) and Grupo Financiero Banorte (GFNORTEO).
Mexico’s central bank may consider slowing the pace of monetary tightening in the coming months as interest rates are already close to the level at which inflation will have a decisive downward trajectory, according to Omar Mejia, deputy governor of the central bank (Banxico).
“One element to consider in upcoming decisions is the degree of monetary tightening that the central bank has implemented to date,” Mejía said in a Grupo Financiero Banorte podcast. “Going forward, it could be considered to slow down the pace of the rate adjustment, since it is already very close to the appropriate level to consolidate a disinflationary process.”
📉 A bad day for Brazil’s Ibovespa:
Brazil’s Ibovespa (IBOV) closed Wednesday with the region’s sharpest losses, falling 0.52%, with the sharpest falls for the shares pf Hapvida (HAPV3), which plunged more than 30%. Petrobras (PETR3; PETR4) shares also tanked as investors awaited the oil company’s financial results.
The state-owned oil company has been affected by the measures adopted by the new government. This week, Petrobras was hit with a four-month tax on oil exports. Its asset sales were suspended for 90 days and it was pressured to adjust fuel prices. The government also has plans to reduce the amount of dividends it pays, a person familiar with the matter told Bloomberg News.
The government has vehemently denied that it is intervening in Petrobras’ internal decisions and has said fuel prices were above international levels before the company adjusted them downward.
🗽On Wall Street:
US stocks dropped for a second straight session as investors revisited their wagers on peak rates after economic data highlighted persistent inflationary pressures and Federal Reserve officials continued to sound hawkish.
The S&P 500 closed the day at its lowest level in nearly six weeks. The Nasdaq 100 dropped to its lowest since January 30. Both indexes had stayed firmly in the red for most of Wednesday’s session after a gauge of manufacturing improved for the first time in six months. Investors balked at a measure of prices paid rising.
Treasury yields remained higher, with the 10-year rate piercing the closely watched 4% level. Fed swaps are now pricing in a peak policy rate of 5.5% in September, with some traders betting that the benchmark interest rate could reach 6%. A dollar index dropped the most since February 1.
Among individual movers, Salesforce Inc. soared in late trading after signaling that it’s making progress in its efforts to boost profitability this year. Lowe’s Cos., after forecasting a decline in sales, fell the most since Sept. 13 during regular trading. Dollar Tree Inc., which also reported earnings, climbed the most in a month. Tesla Inc. dropped 0.7% in late trading as of 4:58 p.m. New York time as it offered updates during its investor day presentation.
Investors remained cautious on Wednesday after Fed officials restated their hawkish stance. Atlanta Fed’s Raphael Bostic called for continued rate hikes to above 5% to make sure inflation doesn’t pick up again. Minneapolis Fed President Neel Kashkari, meanwhile, said he’s concerned that there isn’t much of an indication that the central bank’s rate hikes are slowing down the services sector.
This year could potentially be challenging, according to George Patterson, chief investment officer at PGIM Quantitative Solutions.
“I see more risk to the downside in the US only because the US is firing on all cylinders, and my belief is they’re going to have to raise rates a bit more than people are expecting,” he said in an interview at Bloomberg’s New York headquarters.
Julian Emanuel, chief equity and quantitative strategist at Evercore ISI, says the VIX, a measure of volatility in stocks, hasn’t been the most reliable indicator of what’s happening in the markets recently.
“To say that the volatility markets have been strange for the last couple of months is maybe the understatement of the millennium here,” he said on Bloomberg Television. “And a lot of reason the truth is so difficult to discern is because of these zero-days-to-expiration options, which really are ruling the moves from moment to moment in the markets.”
He says the macro picture will become clearer in the coming weeks, depending on the incoming economic data.Las bolsas de Estados Unidos iniciaron el mes de marzo con pérdidas mientras los inversores siguen evaluando los agresivos discursos de los funcionarios de la Reserva Federal y las perspectivas sobre las tasas máximas de interés.
The Bloomberg Dollar Spot Index fell 0.5%, the euro rose 0.9% to $1.0666, the British pound was little changed at $1.2019 and the Japanese yen was little changed at 136.20 per dollar.
🍝For the dinner table debate:
Amid the abrupt drop in venture capital available for startups, regions like Latin America could move towards more innovative financing models through alternative channels such as fintech and at the same time try to mobilize financial resources that have accumulated in past years, deputy head of the OECD’s SME and Entrepreneurship Division, Lucia Cusmano, said in an interview with Bloomberg Línea.
“For what has to do with venture capital, more innovation is needed there as well, fintech, the possibility of mobilizing financial resources that have accumulated in past years and have not been used because there is the crisis, because the rates of return were very low,” she said.
Cusmano says that in the current context of lower availability of capital there is a clear need to try other mechanisms other than direct loans or guarantees “because they are not always adapted to the needs of emerging companies”.
She added that it is necessary to move towards a model with greater public and private sector participation through investment funds, as is already happening in some other OECD markets such as France. This gives citizens the possibility of “investing in funds that aim to finance SMEs and entrepreneurs”, which opens the window to generate more opportunities beyond commercial banks.
Leidys Becerra, a content producer at Bloomberg Línea, and Isabelle Lee, Vildana Hajric and Angel Adegbesan of Bloomberg News, contributed to this report.
