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U.S. Markets Drop On Eve of Fed Decision; Colombia’s COLCAP Recovers

Amid less appetite for risk, a cryptocurrency recovery looks a long way off

Federal Reserve Exterior As Fed Looks Locked In For Quarter-Point Cut
June 14, 2022 | 06:15 pm

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

🗽 On Wall Street:

U.S. stock markets continued in the red on Tuesday as investors analyze whether the Federal Reserve will raise interest rates further, with a decision to be announced on Wednesday.

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Following the inflation data released last Friday, investors fear that the U.S. central bank will adopt an even more aggressive stance than expected and affect economic growth.

The Dow Jones Industrials fell 0.50%, while the S&P 500 lost 0.38%, its fifth consecutive decline. The Nasdaq Composite (CCMPDL) was buoyed by technology stocks and gained 0.18%.

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Treasuries extended their worst decline in decades, with two-year yields reaching a level last seen in 2007, Bloomberg reported.

Investor fears of stagflation are at their highest since the 2008 financial crisis, while optimism for global growth has fallen to a record low, according to Bank of America Corp’s (BAC) monthly survey of money managers.

Global earnings expectations also fell to 2008 levels, according to the survey of 266 participants, with $747 billion under management.

🔑 The Day’s Key Movements:

Amid lower risk appetite, there is no environment for the cryptocurrency market to recover. Bitcoin (XBT), the largest crypto asset by market capitalization, remains near $20,000 after touching an 18-month low on Monday.

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The bear market in the digital asset has entered its “deepest and darkest” phase, according to strategists at Glassnode, who track an indicator known as realized price, which shows the average purchase price of all bitcoins in circulation.

“The market, on average, is barely above its cost basis, and even long-term holders are now being eliminated from the holder base,” the strategists wrote.

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The ‘crypto winter’ continues to affect businesses and Coinbase (COIN), the largest U.S. exchange, announced it will lay off 18% of its staff.

👑 Latin America’s Leader:

The Colombian stock market was not affected by the losses in the rest of the markets, and the COLCAP index ended with a gain of more than 1%.

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The performance of the utilities, communication services and materials sectors helped to offset the fall in the rest of the region.

Grupo Bolivar (GRUPOBOL) shares led the day’s gains, after being one of the most punished stocks in Monday’s fall.

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The performance was accompanied by ISA (ISA) and Bancolombia (BCOLO), which completed the most important increases of the day.

However, investors remain attentive to the last days of the campaign and to the results of the elections to be held on Sunday, in which Gustavo Petro and Rodolfo Hernández will compete for the presidency.

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📉 A Bad Day:

Latin American markets extended the losses with which they started the week, while risk aversion consolidates amid fears of lower economic growth.

This time, Peru’s stock market was the most affected by the massive sell-off that is taking place in all markets and closed with the worst performance among its Latin American peers.

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The S&P BVL/Peru (SPBLPGPT) dropped 1.38%, dragged down by the performance of the materials, finance and consumer staples sectors.

The Ibovespa (IBOV) accompanied the losses. In the face of a strong wave of stock sales, the index reached below 102,000 points, its lowest level since January 6, although it eventually recovered.

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In addition, investors await the so-called “super Wednesday” when the country’s Central Bank and the U.S. Federal Reserve will make a decision on the interest rates of each of their economies.

The Mexican stock market also followed the trend and the S&P BMV/IPC (MEXBOL) closed with losses after the poor performance of the raw materials, consumer staples and health sectors.

🍝 For the Dinner Table Debate:

South Korean band BTS, which has revolutionized K-Pop, a popular music genre that has expanded globally, announced that it will take a break as a group during BTS FESTA Dinner 2022, an event where the band usually commemorates its anniversary.

However, the band promised its fans that they would return at a later date.

According to the announcement made by the group, which comprises singers Jin, Suga, J-Hope, RM, Jimin, V and Jungkook, and they will “someday” return, after they each take some time to work on their solo careers.

According to an analysis by the South Korean Institute of Culture and Tourism, a concert by the group could generate up to $1 billion from ticket sales, merchandise, and consumer spending, including travel and accommodation.

The Wealth Record estimates the net value of BTS for 2022 at $100 million, and that in 2019 alone, the group generated $170 million from their tour, more than any U.S. band except Metallica.