A roundup of Tuesday’s stock market results from across the region
🗽 On Wall Street:
Investors continue to watch for any signs that inflation pressures could run on for longer than expected and this mood influenced market behavior on Tuesday.
U.S. consumer confidence fell in May to its lowest level since February. The Conference Board’s index fell to 106.4 from an upwardly revised reading of 108.6 in April, demonstrating the impact the cost-of-living hike is having.
In addition, Eurozone inflation accelerated to a record high, and consumer prices rose 8.1% from a year earlier in May.
The S&P 500 closed down 0.63%, while the Dow Jones Industrials slipped 0.67% and the Nasdaq Composite (CCMPDL) dropped 0.41%.
During the day, President Joe Biden used an unusual meeting with Federal Reserve Chairman Jerome Powell to shift responsibility for controlling inflation to the central bank, ahead of the November congressional elections.
With Tuesday’s performance, U.S. markets closed a month full of volatility in which they ended at practically the same level at which they started May.
The S&P 500 registered a slight monthly advance of 0.01% and the Dow Jones Industrials varied by only 0.04%. The Nasdaq Composite, hit by technology stocks, lost 2.05% during the month.
🔑 The Day’s Key Movements:
Oil prices fell after it emerged that OPEC members are evaluating the possibility of exempting Russia from their production deal, which would open the way for other countries to pump more oil.
Exempting Russia from production targets could potentially pave the way for Saudi Arabia, the United Arab Emirates and other producers to pump more crude, according to the Wall Street Journal.
The report trimmed the price gains that had been made after the European Union reached an agreement for a partial blockade on Russian oil.
The next round of sanctions by European authorities would prohibit buying oil from Russia shipped by sea, although the sanctions include a temporary exemption for pipelines.
🥇 Latin America’s Leader:
The Colombian stock market had its best day in months after it felt the effects of the first round of the presidential elections on Sunday, the result of which had not impacted the markets due to the holiday on Monday.
The COLCAP index closed with an increase of more than 4%, with a performance not seen since mid-January, after Sunday’s result determined that the second round of the election will be fought between Gustavo Petro and Rodolfo Hernández.
“Considerations of ‘anyone but Petro’ will prevail,” Edwin Gutiérrez, head of emerging market sovereign debt at Aberdeen Asset Management, told Bloomberg. “Hernandez has a better chance of beating him in the second round.”
The Colombian stock market also benefited from the strong performance of Ecopetrol (ECOPETL) shares, which traded the highest volume on the day, and rose more than 4%.
Tuesday was the oil company’s best day since March. The stock could later be affected by Petro’s proposals to phase out oil exploration, however.
Brazil’s Ibovespa (IBOV) had a volatile session but managed to close with gains.
However, it was hurt by the performance of Petrobras (PETR3; PETR4) shares, which continue to feel the effects of the change in leadership after President Jair Bolsonaro fired the company’s president earlier this month.
📉 A Bad Day:
With the exception of the Colombian and Brazilian stock exchanges, the rest of the markets followed the trend of the United States, which closed with losses as inflation concerns continue.
The Peruvian stock market was the hardest hit in the session and the S&P/BVL Peru (SPBLPGPT) fell by more than 1.2%.
The performance of the industrial, raw material and consumer staples sectors hit the index.
The S&P BMV/IPC (MEXBOL) fell more than 1%, dragged down by the performance of the raw material, communication services and financial sectors.
🍝 For the Dinner Table Debate:
More and more cities are looking to take advantage of digital nomads, people who work remotely and often away from their home countries, and which became a trend in the wake of the pandemic. In fact, almost 50 sovereign governments now offer digital visas or special residency programs for this group of workers.
Many Latin American countries have also joined such initiatives. Economies such as Brazil, Mexico and Argentina are implementing mechanisms in this direction.
To this end, there are various schemes designed to attract workers who are digital nomads through visas. For example, programs can exempt visa holders from local income tax for a stay of six months to two years