A roundup of Wednesday’s stock market results from across the region
🗽 On Wall Street:
U.S. stock markets started June with losses after data revealed that the Federal Reserve still has room to raise interest rates without cooling economic growth.
The ISM report showed that manufacturing activity remained solid in May at 56.1, up from April’s reading of 55.4. “The U.S. economy still looks pretty good and that means the Fed may need to keep the pace of rate hikes at half a point beyond the summer,” said Edward Moya, an analyst at Oanda.
The S&P 500 closed down 0.75%, while the Dow Jones Industrials slipped 0.54% and the Nasdaq Composite (CCMPDL) dropped 0.72%.
The market also welcomed the words of Jamie Dimon, CEO of JPMorgan (JPM), who assured that a “hurricane” is coming on the economic front.
“Right now it’s a little sunny, things are going well, everybody thinks the Fed can handle it. That hurricane is out there, coming our way. We don’t know if it’s a minor one or superstorm Sandy. You better get ready,” he said at a conference sponsored by Alliance Bernstein Holdings.
🔑 The Day’s Key Movements:
Brazilian cryptocurrency exchange Mercado Bitcoin, part of the 2TM holding company, joins the list of unicorns that are laying off staff amid a wave affecting high-growth companies around the world.
2TM said it laid off 90 people, 12% of its team, due to the “changing global financial scenario, high interest rates and inflation, which has had a major impact on technology-based companies.”
“The scenario required adjustments that go beyond the reduction of operating expenses, also making it necessary to lay off some of our employees. The process we undertook was guided by transparency and respect, in order to honor the legacy of each employee who helped us get this far,” the company said in a statement.
Last week, Argentine cryptocurrency company Buenbit laid off 50% of its staff, and Bitso laid off at least 80 people in technical and commercial areas in Mexico.
🥇 Latin America’s Leader:
The Brazilian stock market distanced itself from the losses seen in the rest of the region, although its advance was timid in the midst of an international context marked by falls in the U.S. indices.
The Ibovespa (IBOV) advanced just 0.01% thanks to the performance of the raw materials, health and information technology sectors.
Gains also occurred in the Colombian stock market, which on Tuesday had closed with its best day of the year since January. Although on Wednesday it ended the session practically stable, the numbers in green still feel the results of last Sunday’s presidential elections.
The second round that will be disputed between Rodolfo Hernández and Gustavo Petro on June 19 leaves the former, who is seen as a more pro-market candidate than his leftist opponent, in a better position.
📉 A Bad Day:
The Argentine and Chilean stock markets closed with the worst performance among their Latin American peers on Wednesday, on a day in which only two of the region’s main markets registered gains.
Argentina’s Merval (MERVAL) fell by 1%, affected by the international mood in which the US stock markets started the month with losses, while Chile’s Ipsa (IPSA) dropped by 0.96%, dragged down by the performance of the information technology, raw materials and real estate sectors.
Chile’s stock market decline took place after a speech by President Gabriel Boric in Congress, in which he announced a pension reform and the cancellation of educational debts. The pension reform would be brought forward in August.
The Mexican stock market’s S&P BMV/IPC index (MEXBOL) also closed in negative territory, with a bad performance from shares in the real estate and health sectors.
🍝 For the Dinner Table Debate:
Mark Zuckerberg’s right-hand woman at Meta (FB) announced Wednesday she will step down from her position as COO at the company, even though she will remain on the social networking giant’s board of directors.
Sheryl Sandberg will leave her position as chief operating officer after 14 years. The entrepreneur came to the company in 2008 and was instrumental in turning it into a social networking giant that generated nearly $120 billion in revenue last year.
In an interview with Bloomberg, Sandberg called her time at Meta “the honor and privilege of a lifetime”, but joked that it’s also “not the most manageable job anyone has ever had”.
Javier Olivan, who has led the company’s growth efforts for years, will take Sandberg’s place.
