A roundup of Thursday’s stock market results from across the Americas
👑 Colombia’s Colcap leads in Latin America:
The majority of Latin America’s markets closed with gains on Thursday, while Colombia’s Colcap (COLCAP) posted the strongest advance, closing 2.11%, boosted by the consumer and raw materials sectors.
The shares of Grupo Nutresa S.A. (NUTRESA) saw the sharpest gains, climbing 65.12%, after their trading was resumed on the Colombian equity market, following the final acceptances by the Financial Superintendency for the presentation of IHC Capital’s takeover bid for the food company’s shares.
In August, Colombia’s imports amounted to $7.29 billion, a 36.4% annual increase, the country’s statistics bureau DANE announced Thursday. The growth in the country’s foreign purchases was driven by the manufacturing sector.
Chile’s IPSA (IPSA) closed 1.02% higher, with strong showings by shares of Quinenco S.A. (QUINENC) and Empresa Nacional de Telecom (ENTEL).
Brazil’s Ibovespa (IBOV) moved up 0.77%, while Peru’s S&P/BVL index (SPBLPGPT) gained 0.25% and Mexico’s S&P/BMV IPC (MEXBOL) 0.21%.
📉 A bad day for the Merval:
Argentina’s Merval (MERVAL) put in the worst performance on Thursday, falling 0.25%, with shares of Central Puerto S.A. (CEPU) posting the sharpest losses, closing 2.06% lower.
Argentina’s statistic agency INDEC published its Monthly Economic Activity Estimator (EMAE), showing an increase of 6.4% year-on-year for August. However, the variation with respect to July was 0.4%, evidence of the Argentine economy’s deceleration this year.
🗽 On Wall Street:
Thursday was another down day for stocks, with Treasury yields climbing amid hawkish remarks from Federal Reserve officials and swaps pricing in a 5% peak policy rate in 2023. The pound wavered after Liz Truss resigned as UK prime minister.
The wariness around economic challenges has been so pronounced that it doesn’t take much to see the S&P 500 dropping at least 1% after posting a rally of the same magnitude earlier in the day. It happened again Thursday, with the gauge seeing intraday swings of that size in both directions for the 16th time in 2022 -- the most for any year since the financial crisis.
The S&P 500 slid 0,80%, the Nasdaq Composite (CCMPDL) 0.61% and the Dow Jones Industrial Average 0.30%.
Volatility is showing no signs of abating ahead of Friday’s $2 trillion options expiration and another raft of corporate earnings. In late trading, Snap Inc. plummeted after reporting its slowest quarterly sales growth ever, saying that a decline in advertising spending on the platform continues to drag on results.
A tech-led advance in equities quickly fizzled out Thursday after Philadelphia Fed chief Patrick Harker said policymakers are likely to raise rates to “well above” 4% this year and hold them at restrictive levels, while leaving the door open to doing more if needed. The current benchmark sits between 3% and 3.25%. Fed Governor Lisa Cook also spoke, noting that rates will need to keep rising to get inflation under control.
“Stocks are not out of the woods yet,” said Fawad Razaqzada, market analyst at City Index and Forex.com. “Fears over further tightening of central bank policy amid an environment of high-inflation and low-growth means investors will avoid buying stocks aggressively. Even at these relatively-inexpensive levels.”
Traders also scoured a mixed bag of quarterly results, with Tesla Inc.’s sales disappointing and International Business Machines Corp. topping forecasts. Several market observers said the bar has been lowered quite a bit ahead of the earnings season, boosting the odds of upside surprises. It’s also worth noting that there’s been no shortage of warning signals about the economy from the corporate side.
Alcoa Corp. joined metals higher, but its quarterly loss indicated a worsening environment for a company that recently said it was being squeezed by higher costs and falling aluminum prices. And that’s a dependable barometer of the health of sectors including construction, aerospace and consumer packaging. Another worrisome signal came from Union Pacific Corp., which sees slowing freight demand.
As traders wade through corporate results, “with an extra eye on guidance, expect volatility to remain elevated,” said Mike Loewengart at Morgan Stanley Global Investment Office.
The latest batch of economic reports didn’t provide much encouragement either, with sales of previously owned US homes down for an eighth straight month -- underscoring how soaring mortgage rates are punishing the housing market. The stretch of declines is the longest since 2007, when a housing market collapse swept the economy into the Great Recession.
On the currency markets, the Bloomberg Dollar Spot Index was little changed, the euro rose 0.1% to $0.9784, the British pound was little changed at $1.1227 and the Japanese yen fell 0.2% to 150.15 per dollar.
🔑 Key events of the day:
Crude oil closed higher on Thursday, although it trimmed gains after US stocks began their downward path during the day. Crude oil turned green on optimism that China’s market may ease mandatory quarantine restrictions for travelers. However, it is still all speculation and the government’s decision is not yet known.
Oil prices have been oscillating within a narrow range since late September amid market volatility, concerns about a global economic slowdown and supply restrictions from the Organization of the Petroleum Exporting Countries and its allies.
In fact, today crude closed little changed. West Texas Intermediate (WTI) finished with a 0.50% increase and a price of $85.98. Meanwhile, Brent for December delivery closed at $92.54, with a gain of 0.14%.
The market “is still looking for direction,” Rob Haworth, senior investment strategist at US Bank Wealth Management told Bloomberg. “The market may be getting to a point where it finds a little more range until we really understand that there is a trend in global economic activity.”
🍝 For the dinner table debate:
Following the resignation of Liz Truss as British Prime Minister, with a term that lasted just six weeks and became the shortest duration for a PM in British history, names are beginning to emerge of those who might succeed her.
The list of possible replacements includes those who ran against her during the summer leadership campaigns, current cabinet ministers and even her ousted predecessor, Boris Johnson.
However, since British politics has a habit of throwing curve balls, an outsider could also rise through the ranks to reach 10 Downing Street.
Those who are possible contenders include Rishi Sunak, Penny Mordaunt, Ben Wallace and Suella Braverman.
Following Truss’ decision, the Conservative Party set a high threshold of support for candidates seeking to reach the post, of 100 MPs, and the party aims to name a new leader and PM on October 28.
The successor will be the fifth prime minister in less than seven years and will face the titanic task of trying to rebuild a party that is more than 30 points behind the Labour Party in the polls.
-- Sebastián Osorio Idárraga and Leidys Becerra, content producers at Bloomberg Línea, and Rita Nazareth of Bloomberg News, contributed to this report.