A roundup of Thursday’s stock market results from across the region
👑 Argentina, Latin America’s leader
The performance of Latin American stock markets was volatile on Thursday in a session in which the Argentinean market once again recorded the highest gain in the region for the second consecutive day.the Merval (MERVAL) advanced by 4.39% and had by far the best performance in the region.
During the day, YPF (YPFD), Holcim Argentina and Pampa Energía (PAMP) shares were among the best performers.
Economy Minister Sergio Massa, spoke today at a conference attended by the country’s businessmen and confirmed that he is negotiating three mechanisms to strengthen the Central Bank’s reserves with an Asian, a European and a North American bank.
These mechanisms could include the repurchase of debt.
“The local market highlights the project for the production of ‘cells’ for lithium batteries, in which the oil company YPF will participate. In relation to this, Foreign Minister Santiago Cafiero met on Wednesday with Susan Segal from the US and with business leaders from the sector with the objective of increasing bilateral trade and the development of the sector”, said Leonel Buccolo, analyst at Rava Bursátil.
Brazil’s Ibovespa (IBOV) also closed with gains, although on a day of volatility on a par with the markets in the United States.
📉 A bad day for Chile’s IPSA:
Chile’s IPSA (IPSA) saw the steepest decline in the region, dropping 1.11%, after materials, industrial ad tech shares had a poor performance.
Chilean GDP growth remained unchanged in the April-June period with respect to the previous three months, worse than all forecasts, Bloomberg reported. From a year earlier, the economy expanded 5.4%, the central bank reported.
“Chile’s GDP data for the second quarter showed a second consecutive drop in domestic demand, confirming that the economy has reversed trend after the sharp uptick in the pandemic,” said Felipe Hernández, an economist at Bloomberg Economics.
In addition, it was reported that the current account deficit reached US$6.6 billion in the second quarter, almost 50% higher than the median of the expectations of four analysts surveyed by Bloomberg.
Mexico’s stock market also fell during the day. The communication services, consumer discretionary and financial sectors hit the performance of the S&P/BMV IPC (MEXBOL).
Shares of Alsea (ALSEA*), Cemex (CEMEXCPO) and América Móvil (AMXL) suffered the day’s biggest losses.
🗽 On Wall Street:
Stocks look set for a steady open in Asia on Friday as investors digest mixed policy signals from Federal Reserve officials amid a debate on whether they will tilt to less aggressive interest-rate hikes.
Futures rose for Japan and Australia and were little changed for Hong Kong. S&P 500 and Nasdaq 100 contracts fluctuated after US shares closed up on thinner than usual volumes.
The S&P 500 climbed 0.23% on Thursday, the Dow Jones Industrial Average advanced a nominal 0.06% and the Nasdaq Composite (CCMPDL) gained 0.21%.
Shorter maturities led a climb in Treasuries Thursday that left the two-year yield at about 3.20%. A dollar gauge hit the highest in over three weeks.
Fed officials diverged a little in policy comments. St. Louis’s James Bullard urged another 75 basis-point move while Kansas City’s Esther George struck a more cautious tone, saying the case for rate rises remains strong but the pace is up for debate.
Investor sentiment has been boosted by expectations of a slower pace of monetary tightening and signs that high inflation is cooling. There remain plenty of hurdles ahead for the 12% jump in global equities from June lows, not least the risk of a synchronized global economic slowdown.
While “lower volatility both in fixed income and in equities is starting to pull people back into the market” events such as the Fed’s annual symposium in Jackson Hole, Wyoming next week will help determine if that’s sustainable, Nicholas Colas, co-founder at DataTrek Research LLC, said on Bloomberg Television.
The latest US data showed jobless claims fell for the first time in three weeks. A gauge of manufacturing activity in the Philadelphia area unexpectedly expanded, though the outlook remained weak. Existing-home sales fell for a sixth straight month.
Elsewhere, oil held a climb to about $90 a barrel. Both gold and Bitcoin were little changed.
On the currency markets, the Bloomberg Dollar Spot Index rose 0.6%, the euro was at $1.0089, the Japanese yen was at 135.87 per dollar and the offshore yuan was at 6.8038 per dollar.
🔑 The day’s key events:
Oil prices continued the rally they began on Wednesday, taking advantage of this week’s Energy Information Administration (IEA) report that US inventories fell by 7.06 million barrels last week.
The figure is a further sign that demand remains strong, even though the possibility of an economic slowdown has increased pressure on the oil market.
Earlier in the week, prices fell to their lowest level in six months amid fears of slower growth in China and the possibility of a nuclear deal with Iran.
The WTI benchmark traded above US$90 per barrel, while Brent hovered near $97. Dennis Kissler, senior vice president of trading at BOK Financial, explained to Bloomberg that the IEA report gave signals to investors that “fundamentals may not be as negative for crude as thought a week ago.”
However, he cautioned that there are still concerns about the economic outlook, which is keeping the market “very nervous.”
🍝 For the dinner table debate:
Argentine e-commerce giant MercadoLibre (MELI) announced the launch of a cryptocurrency in Brazil, called MercadoCoin, which is available since Thursday to 500,000 customers in that country. The cryptocurrency, as announced by the company, will have a value of 10 cents to the dollar initially and will then be subject to market fluctuations.
Fernando Yunes, senior vice president of MercadoLibre in Brazil, said the company developed MercadoCoin as a tool of the platform’s loyalty program. “You get MercadoCoins when you buy products on MercadoLibre, but going forward, at some point they will be used outside of MercadoLibre,” he explained.
Initially, the company’s cryptocurrency will not appear on exchange platforms such as Mercado Bitcoin, Coinbase or Binance. The executives’ perspective is that by the end of August the entire base of 80 million users in Brazil will have access to the cryptocurrency.
The management and custody of the tokens will be in charge of the Argentine fintech Ripio.
-- Carlos Rodríguez Salcedo and Leidys Becerra, content producers at Bloomberg Línea, and Sunil Jagtiani of Bloomberg News, contributed to this report.
