A roundup of Monday’s stock market results from across the region
👑 Latin America’s Leaders:
Chile’s IPSA (IPSA) and the Peruvian stock exchange (SPBLPGPT) were the best performers in Latin America on Monday, both closing with a moderate gain of 0.35%.
The IPSA rose thanks to the performance of the industrials, materials and non-basic consumer products sectors. Shares of Sud Americana de Vapores (VVAPORES), Sociedad Química y Minera (SQM/B) and SMU SA (SMU) were among the highest gainers.
The Peruvian index was boosted by the industrials, consumer staples and materials sectors. Shares of Sociedad Minera Cerro Verde (CVERDEC1), Ferreycorp SA (FERREYC1) and Inretail Peru (INRETC1) were among the session’s top performers.
📉 A Bad Day:
The S&P BMV/IPC (MEXBOL) had the worst performance among its Latin American peers on Monday, falling 0.49%. The performance of the raw materials, finance and consumer staples sectors affected the index on a day with lower trading volume due to the holiday in the US.
The Colombian stock exchange (COLCAP) and Argentina’s Merval (MERVAL) did not trade due to local holidays.
🔑 The Day’s Key Events:
Oil prices made little progress in their recovery from last week’s decline on Monday after US President Joe Biden said that a recession in the country is not as “inevitable” as some traders believe. The market is still assessing the impact that the aggressive tightening of monetary policy will have on the economy and consumption.
Brent was up 0.89% after losing more than 5% on Friday, when markets were rattled by concerns related to the pace of Fed rate hikes. Brent for August settlement closed at $114.13 a barrel, while West Texas Intermediate for July delivery rose 0.7% to $110.27 a barrel.
“The market remains extremely tight, but the threat of recession is one of the few negative forces for crude oil prices. Whether that will be enough to create anything more than two-way price action is another matter. The price was rising over the previous month and the bullish arguments remain much more compelling,” OANDA analyst Craig Erlam said.
🗽 On Wall Street:
US markets remained closed for a holiday on Monday, but US index futures staged a rebound oalong with stocks in Europe as investors weighed whether last week’s selloff had gone far enough to price in concerns about rising rates and slowing growth.
S&P 500 contracts advanced about 1.1% after the worst week for the underlying gauge since the start of the pandemic. Nasdaq 100 futures rose around 1.1%. A dollar gauge edged lower. Treasury futures also slid, with no cash trading due to a US holiday.
Banks, travel & leisure and energy companies led the advance in the Stoxx Europe 600 index. Basic resources underperformed amid a slump in raw-material prices, while construction companies declined. Underscoring the uncertainty pervading markets, Swiss engineering group ABB Ltd. declined after postponing a listing of its electric-car charging business, citing volatile conditions.
France’s equity benchmark lagged after President Emmanuel Macron lost his absolute majority in parliament, putting his reform agenda in peril. UK bonds fell as the country faces up to surging inflation and labor strikes as well as a rising risk of recession in a series of setbacks that have echoes of the 1970s.
Volatility measures remain elevated as investors look for an entry point into equity markets roiled by soaring price pressures and worries that aggressive monetary tightening will tip major economies into recession. JPMorgan strategists said pressure on stocks should ease in the second quarter as inflation moderates, but others -- including Morgan Stanley -- cautioned that more losses may be in store.
“The US holiday could make for a relatively quiet start to the week as investors have one eye on Powell’s testimony. That said, nothing is guaranteed in these markets and there is no shortage of other drivers,” said OANDA’s Erlam.
🍝 For the Dinner Table Debate:
More than half of consumers in the world’s major economies didn’t increase their savings levels during the pandemic, according to a survey by YouGov that covered 18 countries and was shared exclusively with Bloomberg News, the results of which demolish the notion that households have a cushion against the growing cost-of-living crisis.
YouGov data shows that 51% of respondents did not increase their savings during the pandemic. The lowest rate was in Germany, at 39%, while Italy’s was 40%. The US, the United Kingdom and Canada also scored below 50%.
The survey, covering 20,000 adults, undermines hopes that a global savings glut will help households weather an inflationary spike. In contrast, it paints an uneven picture of finances, which could lead to greater inequality in the coming months.
-- Leidys Becerra, a content producer for Bloomberg Línea, and Robert Brand, of Bloomberg News, contributed to this report