A roundup of Monday’s stock market results from across the region
🗽 On Wall Street:
While last week the U.S. stock markets took a boost from the good projections given by Federal Reserve chairman Jerome Powell, in which he spoke of the strength of the economy, this week the opposite happened, with the main U.S. indices closing Monday with losses Powell showed a more hawkish tone and warned that “inflation is too high”, and that the Fed will take all the “necessary measures” to address it.
“If we conclude that it is appropriate to act more aggressively by raising the federal funds rate by more than 25 basis points at a meeting or meetings, we will do so,” Powell said in a speech to the National Association for Business Economics.
The S&P 500 fell slightly by 0.04%, while the Nasdaq Composite (CCMPDL) lost 0.40%, and the Dow Jones Industrials slipped 0.58%.
“The risks of 50 basis point rate hikes should dampen some equity buyers, who may become defensive,” Edward Moya, an analyst at Oanda, said in a note.
Two-year Treasury yields rose as high as above 2.12%, the highest level since 2019.
🔑 The Day’s Key Events:
Oil prices rose again as traders are attentive to the war between Russia and Ukraine, which threatens to paralyze the supply of the world’s third crude oil producer.
European Union countries are now assessing whether to ban Russian oil imports, as the United States has already done. Some countries in the bloc are pushing for a new round of sanctions, although there is still no unanimity that purchases of crude from Russia should be included, Bloomberg News reported.
Rohan Reddy, research analyst at Global X Management, estimated that sanctions in this regard would affect 4% to 5% of global supply.
Oil prices rose more than 7% and WTI and Brent benchmarks remain above US$100.
“Market jitters were not helped by an attack on a Saudi oil terminal this weekend, which Houthi rebels claimed responsibility for, and which caused a temporary drop in production and helped lift the price of a barrel of Brent to levels not seen in more than a week,” Ricardo Evangelista, analyst at ActivTrades, wrote in a note.
🥇 The Leader:
Latin American stock exchanges were not affected by the losses in the U.S. markets and none of the main stock market indexes registered declines at the beginning of the week.
The best performer was the Chilean Ipsa (IPSA), which closed with an increase of 2.89%. The index not only closed its fifth consecutive session with gains, but also had its best day so far this month and its second best day of the year.
The best performing stocks were those of Grupo CAP (CAP), the largest steel producer in Chile; Entel (EENTEL), whose share price has been boosted by last week’s announcement of the sale of its data centers for almost $800 million; and Aguas Andinas (AGUAS/A), on the same day that it reported the acquisition of Suez, its controlling company, by Veolia Environnement.
Brazil’s Ibovespa (IBOV) closed with gains, rising 0.73%, while the Colombian and Mexican stock exchanges remained closed due to national holidays.
🍝 For the Dinner Table Debate:
A Boeing (BA) 737-800NG operated by China Eastern Airlines (CEA) crashed Monday in southwest China’s Guangxi province, the country’s first commercial air disaster in a decade. The plane was carrying 123 passengers and nine crew members. The accident occurred in a mountainous area near the city of Wuzhou, according to the Civil Administration of China.
Although it is not yet clear what caused the catastrophe, the airline informed that it will ground all its Boeing 737-800 aircraft as of Tuesday. Chinese President Xi Jinping urged rescue efforts following the crash, state television reported.
The airline confirmed that people have died following the crash, and so far no survivors have been reported.
The last fatal accident in China occurred in 2010, when an Embraer (ERJ) plane belonging to Henan Airlines carrying 96 people crashed in Yichun, in the northeast of the country, causing the death of 44 people.
