A roundup of Friday’s stock market results from across the Americas
🌎 Argentina’s Merval climbs 2.28%:
In Latin America, the downward trend was similar to what occurred in the US markets, with the exception of two indices: the general index of the Lima Stock Exchange (SPBLPGPT), and the Bogota Stock Exchange (COLCAP).
The two South American stock exchanges were spared from the general decline: the BVL’s general index rose 2.14% in the last five days, and closed this Friday with a 0.23% increase. The day’s gains were led by the consumer staples (1.63%) and materials (0.86%) sectors; likewise, the shares that rose the most were those of Cerro Verde (CVERDEC1), with a 3.79% increase; Alicorp (ALICORC1), with a 2.75% increase; and Backus (BACKUSI1), with a 2.18% increase at the close.
Although the Colcap fell 0.31% at the close of trading today, the Colombian market closed the week with an increase of 0.72%. In contrast, the Colombian peso closed with a fall of 3.68% in the last five days.
On the other hand, the other Latin American stock markets closed the week with losses. The Mexican stock market fell the most: the S&P/BMV IPC ndex of the Mexican Stock Exchange (MEXBOL) registered a drop of 1.67% in the last five days, according to Bloomberg data. Even so, this Friday the Mexbol rebounded 1.02%, driven by the financial (2.16%), industrial (1.23%) and non-basic consumption (1.08%) sectors.
Argentina’s MERVAL had the best performance in the region on Friday, gaining 2.28%, driven in part by the beginning of the Argentinean government’s payment to the International Monetary Fund (IMF) through Special Drawing Rights (SDR), obtained from Qatar.
The Santiago Stock Exchange’s IPSA index (IPSA) closed the week with a fall of 0.73%, although the Chilean market has been characterized by its constant rises and by the appetite of investors to bet on this index in recent weeks. Finally, Brazil’s Ibovespa (IBOV) fell 0.57% over the last five days.
🗽On Wall Street:
Stocks fell as Apple Inc. dipped below the $3 trillion mark and some other megacaps like Tesla Inc. and Meta Platforms Inc. slipped, Amazon Inc. rallied after its results. Treasuries rose, reversing some of this week’s losses after a mixed jobs report.
There was something for every bull and bear in Friday’s data: the 187,000 growth in payrolls was softer than estimated, wages topped forecasts and unemployment fell. With 47 days to go before the next Federal Reserve decision — and so many other economic reports in between — the one thing that really hasn’t changed was the sense the Fed is close to wrapping up its hiking cycle.
Swap traders project a 40% chance of another quarter-point rate increase by the end of this year — with the contracts pricing in about 10 basis points of tightening. By the end of 2024, they project rate cuts totaling more than 125 basis points.
The S&P 500 erased a gain that approached 1% earlier in the day. Apple dropped almost 5% after its outlook sparked worries over tepid demand. Amazon climbed over 8% on a bullish revenue forecast. Treasury 10-year yields fell from the highest level since November. The dollar halted a four-day advance.
“We think it’s worth staying cautious while still respecting the market’s momentum,” said Callie Cox, investment analyst at eToro. “Bull markets are tough to fight, but look for quality risk and brace yourself for a summer storm in what’s usually a bumpy time of year.”
In reaction to the jobs data, Seema Shah, chief global strategist of Principal Asset Management, said: “Today’s jobs report will not clear up the Fed’s dilemma. This jobs report is definitely not a gamechanger. The Fed still has another report to come before their next meeting but, if no clear direction emerges, the Fed is likely to stay put.”
For his part, Oscar Munoz, chief US macro strategist at TD Securities, said: “While today’s report does not cleanly argue for a skip decision for the September FOMC meeting, we are of the view that most of the details should be judged as positive news by most Fed officials. We continue to expect the FOMC to pause in September, with July’s rate hike likely the last of the Fed’s tightening cycle.”
Corporate highlights:
- Booking Holdings Inc. rose after reporting revenue that beat analysts’ estimates, reflecting strong demand for travel.
- DraftKings Inc. climbed as the online sportsbook posted sales that beat expectations and it raised its forecast for the year.
- Atlassian Corp. rallied after delivering a forecast for the new year that quelled investor anxieties over a slowdown in internet technology spending.
- Tupperware Brands Corp. gained after the food-storage container company reached an agreement with its lenders to restructure its existing debt obligations, as it continues its turnaround efforts.
- Nikola Corp. fell after saying it’s tapping a former General Motors Co. vice chairman to serve as its chief executive officer, replacing the current CEO after less than a year of running the electric truck maker.
- Icahn Enterprises LP dropped after Carl Icahn slashed his company’s quarterly payouts in half and pledged to “stick to our knitting” in another substantive move acknowledging complaints raised by short-seller Hindenburg Research earlier this year.
- Block Inc., Jack Dorsey’s payments company, slipped after reporting results that fell short of some analysts’ expectations.
On the currency markets, the Bloomberg Dollar Spot Index fell 0.3%, the euro rose 0.5% to $1.1006, the British pound rose 0.3% to $1.2743 and the Japanese yen rose 0.5% to 141.82 per dollar.
🍝 For the dinner table debate:
The public finances of countries worldwide are under scrutiny, and not even world powers such as the United States have been able to escape the reviews and analyses being carried out by the main credit agencies. Thus, this week Fitch Ratings downgraded the AAA rating of the US, which generated criticism but also concern among several analysts.
In the midst of a global impact that countries are experiencing after the pandemic and with interest rates rising globally to combat inflation pressures, the stakes for developing countries in need of capital are even higher, as any negative revision of their credit rating may translate into higher borrowing costs in the coming years. The irritation of being judged by their borrowing habits persists regardless of a country’s power and prosperity.
Countries come under pressure from rating companies because they are embedded in the global investment system. Their uneasy relationship often fuels political anger, even if such assessments only serve to hold up an uncomfortable mirror to governments for decisions made to please voters.
Paola Villar S, a content producer at Bloomberg Línea, and Rita Nazareth of Bloomberg News, contributed to this report
