A roundup of Wednesday’s stock market results from across the Americas
🌎 Mexico leads LatAm gains:
Among the main regional indexes, the S&P/BMV IPC index of the Mexican Stock Exchange (MEXBOL) stood out, closing with the highest increase among its Latin American peers after rising 0.90%.
Brazil’s Ibovespa (IBOV) gained 0.45% at the close of Wednesday’s session.
On the Mexican stock exchange, leading shares were Grupo Aeroportuario del Pacífico (GAPB), with an increase of 4.83%; Grupo Aeroportuario del Sureste (ASURB), with an increase of 4.28%; and Grupo Cementos de Chihuahua (GCC*), with an increase of 3.63%.
The Lima Stock Exchange general index (SPBLPGPT) climbed 0.30%, driven by gains in the financial sector (1.21%), and among the best performing shares were: Agroindustrial Pomalca (POMALCC1), with a rise of 3.33%; SiderPerú (SIDERC1), with a rise of 2.46%; and Credicorp (BAP), with a rise of 1.48%.
Argentina’s Merval (MERVAL) was down 0.07% at closing, while the Chilean (IPSA) and Colombian (COLCAP) exchanges dropped 0.50% and 0.59%, respectively.
🗽On Wall Street:
There was something for every Wall Street bull and bear in Jerome Powell’s remarks Wednesday, but the market finished the day betting the Federal Reserve’s next move will possibly be a skip.
Two-year US yields dropped alongside the dollar. Stocks rebounded from session lows, with the Dow Jones Industrial Average notching its 13th straight advance — the longest winning run since 1987. In late trading, Facebook parent Meta Platforms Inc. climbed after projecting revenue that beat estimates while EBay Inc. fell on a disappointing profit outlook.
The Fed raised rates by 25 basis points to the highest level in 22 years, and Powell said further hikes will be “data dependent” as officials fine-tune their effort to further quell inflation. Swaps referencing future decisions priced in slightly lower odds of another increase this year, which ebbed to 47%.
“In our opinion, the rate hiking cycle is done and the Fed will now pause for the rest of the year. The latest market reaction also supports this thesis with yields dipping slightly across the front end of the yield curve,” Rajeev Sharma, managing director of fixed income at Key Private Bank, said.
Frances Donald, global chief economist at Manulife Investment Management, echoed that sentiment.
“We now believe that the Fed is on a prolonged ‘hawkish hold’. In our base case, their next move will likely be a cut but it will take until 2024 until we see it. That said, Powell will have no choice but to keep the threat of hikes alive, lest he encourage markets to prematurely price in cuts and reignite inflation expectations,” Donald said.
Another driver of trading Wednesday was the large batch of earnings reports, with results from big tech being highly scrutinized after the shares notched a historic advance in the first six months of the year.
Google parent Alphabet Inc. climbed to a 15-month high as revenue beat expectations, while Microsoft Corp. fell the most since January on a tepid sales growth and Texas Instruments Inc.’s lukewarm forecast weighed on chipmakers.
“Big tech earnings have been very Darwinian, and investors are only rewarding the companies that truly post strong results,” David Bahnsen, chief investment officer at the Bahnsen Group. “After extreme gains so far this year in big tech stocks, we have now moved to a phase where each company’s stock price is very non-correlated to one another.”
- The Bloomberg Dollar Spot Index fell 0.3%
- The euro rose 0.4% to $1.1095
- The British pound rose 0.3% to $1.2946
- The Japanese yen rose 0.5% to 140.25 per dollar
🍝 For the dinner table debate:
What will Elon Musk achieve with the conversion of Twitter to ‘X’? The billionaire entrepreneur received more than one criticism after the rebranding of the social network of the iconic blue bird; a logo that can no longer be viewed from the web or from Twitter’s headquarters in San Francisco (it can still be seen from the mobile application).
The “destruction” of the Twitter brand will make terms like ‘tweet’ pass into popular culture, but it will also cost billions to the company that Musk acquired not long ago.
Following the rebranding on Sunday, ‘X’ - until then Twitter - lost an estimated US$4 billion and US$20 billion in brand value, according to analysts and branding agencies, adding to the decline in market value the social network had already suffered when Musk acquired it in October 2022.
According to Bloomberg, several brand agencies describe the company’s move to change its product name as a mistake, considering that ‘X’ will require its parent company to rebuild from scratch the linguistic consensus that already existed on Twitter and the cultural pull that surrounded it.
Paola Villar S, a content producer at Bloomberg Línea, and Rita Nazareth of Bloomberg News, contributed to this report
