A roundup of Friday’s stock market results from across the region
👑 Latin America’s Leader:
All Latin American stock exchanges closed higher on Friday, with Colombia’s stock exchange (COLCAP), Argentina’s Merval (MERVAL) and Chile’s IPSA index (IPSA) posting the strongest gains.
The COLCAP closed with a 2.65% advance, boosted by shares in the financial, energy and utilities sectors, while the Argentine index advanced 1.81%, continuing Thursday’s positive performance, when it was the only stock exchange in the region to close with gains.
Chile’s IPSA gained 0.87%, buoyed by the raw materials, finance, energy and consumer staples sectors.
Brazil’s Ibovespa (IBOV), Mexico’s S&P BMV/IPC (MEXBOL) and Peru’s stock exchange (SPBLPGPT) also closed higher.
🗽 On Wall Street:
Treasuries surged after an ugly first half as weak economic data added to recession fears. A late-day rebound in stocks was exacerbated by low volume ahead of Monday’s US holiday.
Bond yields sank, with the five-year rate at one stage plunging more than a quarter of a percentage point. Traders are paying the most since March to hedge against a deeper slide in 10-year US yields. All major groups in the S&P 500 rose, while the Nasdaq Composite (CCMPDL) advanced 0.90% and the Dow Jones closed 1.05% higher.
The risk of a renewed selloff in equities is still high as investors are pricing in a mild recession, Goldman Sachs Group Inc. strategists said. Corporate earnings will likely come under pressure as margins face the test of inflation and weakening consumer sentiment, they added. A gauge of US manufacturing fell to a two-year low.
“That’s what many investors are now worried about -- the growth outlook,” said Leo Grohowski, chief investment officer at BNY Mellon Wealth Management. “That’s the right thing to worry about. We still have to be worried about inflation, but I’m more worried about economic growth slowing.”
Both stocks and bonds were recently rocked by outflows on fears the economy could contract amid sky-high inflation and hawkish central banks. About $5.8 billion exited global equity funds in the week through June 29, Bank of America Corp. said, citing EPFR Global data. Bonds had redemptions of $17 billion.
A survey conducted by 22V Research showed that 71% of the investors polled believe that second-quarter results will be a negative driver for stocks, wrote founder Dennis DeBusschere. The respondents also estimated 2022 earnings-per-share will come in around $212 -- 7% lower than consensus forecasts of $228.
“I don’t think that equity markets have fully priced in a recession,” said Brad Neuman, director of market strategy at Alger. “Normally, stocks bottom just before earnings bottom, and earnings haven’t declined yet. Estimates remain far too high.”
In corporate news, Micron Technology Inc. flagged that demand was cooling for chips used in computers and smartphones. General Motors Co. expects second-quarter sales and profit to take a hit due to supply-chain problems, but the automaker said it can make up for delayed production later this year.
Crypto broker Voyager Digital Ltd. is temporarily suspending trading, deposits and withdrawals due to difficult market conditions, amid a deepening meltdown in beleaguered cryptocurrency markets.
Copper tumbled to a 17-month low as deepening fears about an economic slowdown drove a rout in industrial commodities. Crop futures sank in the US, with wheat closing the week at levels not seen since before Russia’s invasion of Ukraine.
Global crude prices could reach a “stratospheric” $380 a barrel if US and European penalties prompt Russia to inflict retaliatory crude-output cuts, JPMorgan Chase & Co. analysts warned.
🔑 The Day’s Key Movements:
Oil rose ahead of the US holiday weekend, as export disruptions in Libya exacerbated global supply concerns.
West Texas Intermediate (WTI) rose above $108 per barrel, posting a slight weekly gain after falling in the previous two weeks. In June, production from the Organization of the Petroleum Exporting Countries (OPEC) fell by 120,000 barrels per day, marking a second consecutive monthly decline, according to Bloomberg.
“Crude oil prices are ending the week on a high note as the political crisis in Libya is causing a sharp drop in oil exports. We have seen this movie before and a tight oil market and higher strength in key ports should provide underlying support for oil prices,” Oanda’s Edward Moya said.
🍝 For the Dinner Table Debate:
Elon Musk’s fortune plummeted by nearly $62 billion during the first half of the year. Jeff Bezos’ deflated by about $63 billion, and Mark Zuckerberg’s net worth fell by more than half.
In total, the 500 richest people in the world included in Bloomberg’s ranking lost $1.4 trillion in the first half of 2022, a dizzying decline that marks the sharpest six-month drop of the group of the world’s richest billionaires.
It’s a sharp turnaround from the previous two years, when the fortunes of the ultra-wealthy surged as governments and central banks implemented unprecedented stimulus measures in the wake of the pandemic, boosting the value of everything from tech companies to cryptocurrencies.
Now that monetary policymakers are raising rates to combat high inflation, some of the stocks that rose the most (and with them the worth of the billionaires who own them) are rapidly losing altitude. Tesla Inc (TSLA) had its worst quarter ever in the three months ending in June, while Amazon Inc (AMZN) plunged the most since the dotcom bubble burst.
-- Leidys Becerra, a content producer for Bloomberg Línea, and Rita Nazareth, of Bloomberg News, contributed to this report
