U.S. Markets Continue Decline; Colombia’s COLCAP Leads LatAm Losses

The volatility on the stock market was also reflected in oil prices, which rebounded in late trading

A trader works on the floor of the New York Stock Exchange (NYSE) in New York, U.S. Photographer: Michael Nagle/Bloomberg
May 19, 2022 | 06:10 PM

A roundup of Thursday’s stock market results from across the region

🗽 On Wall Street:

The prospects of slower economic growth, amid high inflation, set the mood for investors in a session in which the stock markets struggled to keep the numbers in the green on Thursday.

In the end, concerns about tighter monetary policy weighed on stock market performance and all three major U.S. indicators closed with losses.

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The S&P 500 fell by 0.58%, while the Dow Jones Industrials dropped 0.75% and the Nasdaq Composite (CCMPDL) fell 0.26%.

The massive sell-off in stocks this week has left the S&P 500 on the verge of its seventh weekly decline, the longest streak since the dotcom bubble burst more than two decades ago, Bloomberg reported.

“In some cases, we’re already in a period of stagflation, but the question now is how long that will last. That just casts a negative tone on the markets,” Chris Gaffney, president of global markets at TIAA Bank, told Bloomberg.

🔑 The Day’s Key Events:

The volatility seen in stocks was also felt in the oil market, which rebounded in the final hours of trading and recovered after two days of losses.

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Prices have come under pressure as China struggles to contain a wave of Covid-19 contagions. While the financial center of Shanghai began to emerge from tight lockdowns, there have been new outbreaks in other cities and disruptions in Beijing, Bloomberg reported.

“WTI crude should be well supported at the US$100 level as U.S. production is slowly rising,” said Edward Moya, an analyst at Oanda, who added that investors are also keeping an eye on the European Union’s decision on Russian crude imports.

Oil prices have risen more than 40% this year amid lower global inventories and the effect of the war in Ukraine.

🥇 The Leader:

The Peruvian stock market had the best performance among its Latin American peers, in a session in which most markets managed to register gains after yesterday’s falls amid fears coming from the United States.

The materials, financial and utilities sectors led the day’s gains.Trevali (TV), Minas de Buenaventura (BBVN) and Volcan Cia Minera (VOLCABC1) shares were among the day’s best performers.

Brazil’s Ibovespa (IBOV) managed to sustain the advance seen in the morning and rose, in a volatile session abroad. The increase in iron ore prices boosted commodities-related stocks, which helped to maintain the positive tone.

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Gains were also seen in the S&P BMV/IPC (MEXBOL), which was boosted by the materials, communication services and industrial sectors.

📉 A Bad Day:

The Colombian stock market once again had the worst performance among the region’s markets and, together with Argentina’s Merval (MERVAL), were the only ones to show losses in a day of volatility.

In the case of the Colombian COLCAP index, the most affected shares continue to be that of Grupo Nutresa (NUTRESA), which continue to fall after the third takeover bid launched by Grupo Gilinski was declared void this week.

The food company’s stock fell more than 8%. For now, the Gilinski’s do not plan to launch a new offer until the presidential elections are over and the political uncertainty is cleared.

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The performance of the Colombian stock market was also affected by the fall of Ecopetrol (ECOPETL) shares, which had fallen in Wednesday’s session after the market received rumors of a possible share issue by the company.

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🍝 For the Dinner Table Debate:

Apple (AAPL) executives presented a preview of its upcoming mixed reality viewer to the company’s board last week, according to sources cited by Bloomberg.

In recent weeks, Apple has also accelerated development of rOS, short for reality operating system, the software that will run on the viewer, according people familiar with the work. That progress, along with the presentation to the board, suggests the product’s debut could come in the next few months.

The viewer, which combines elements of virtual and augmented reality, is Apple’s next big bet. It represents the company’s first major new product category since the Apple Watch in 2015, and would mark the tech giant’s leap into a still nascent sector.