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Wednesday, November 30, 2022

The Fed’s threatening announcement hit the US stock market and LatAm. influenced

A possible increase in interest rates affected the behavior of Latin American markets, which ended the week with losses.

The biggest setback came in Brazil, where Ibovespa fell more than 2%, dragged down by the performance of the energy, industry and information technology sectors.

Shares of Locaweb, Azul and Gol were among the biggest losers of the day. Shares of Petrobras also closed lower.

Mexico’s stock market closed with losses for three consecutive days. Non-basic consumer products, industrial and materials sectors hit the red numbers of S&P/BMV IPC

Mercado Latam

and wall street

Those responsible for US monetary policies insisted again that they would do everything in their power to reduce inflation, in a “threatening” tone. Investors on Thursday reacted to comments from St. Louis Fed Chairman James Bullard and Kansas City Fed Chairman Esther George, who remained adamant on the need to raise interest rates further.

He told the Wall Street Journal that Bullard proposed another major hike in the benchmark rate, which would put “significant pressure on inflation.”

George, for his part, said that “the case for continuing to raise rates remains strong”, although he stressed that he should be aware that policy decisions “often act delayed”.

Those comments included Richmond Federal Reserve Bank Chairman Thomas Barkin, who insisted on Friday that he was “committed” to bringing inflation back to the 2% target. “We’ll do whatever it takes to get there.”

With this position, the S&P 500 fell 1.29%, while the Dow Jones Industrial was down 0.86%. The Nasdaq Composite dropped 2.01%.

This volatility also had to do with the expiration of $2 trillion in options, forcing investors to roll over existing positions or start new ones.

Internac

what happened during the day

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Despite a modest rebound in oil prices, they accumulated a 1.5% weekly loss, while rumors of an economic slowdown are weighing on investor sentiment.

Expectations of lower market growth outweighed US signals that demand remained strong.

Another point that affected the performance was the progress in negotiations for a nuclear deal with Iran. “This remains a potential downside for prices, given the possibility that too much crude will be hitting the market very soon,” said Craig Erlam, an analyst at Oanda.

Cryptocurrencies were also affected, with bitcoin recording a 9.2% drop during the day, its biggest since June 18.

How markets behave in Latin America

Argentina:

The Argentine ambassador to the United States, Jorge Argüello, was one of the heroes of the conference organized by the American Society and Council of the Americas, together with the Argentine Chamber of Commerce and whose keynote speaker was the Minister of Economy, Sergio Massa.

Bolivia:

In May, President Luis Arce promoted wage increases for Employee Day by 3% in basic pay and 4% in minimum wage. Although the measure was positive, currently only 10% of the population in the country has a formal job which makes the measure effective.

Brazil

He said Citi’s head of capital markets in Brazil, Marcelo Milan, said investors should expect a definition of how the electoral government’s economic team will deal with the prospect of a “very challenging first year” after the election.

Chile

Chilean authorities are preparing to file legal action against mining company Ojos del Salado, which is 80% owned by Lundin Mining and 20% by Sumitomo, for a 35-metre-diameter sinkhole that opened in Tierra in early August. Appeared at the Alcaperosa mine in Amarilla. Atacama area.

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Colombia

The Minister of Finance, Jose Antonio Ocampo, sent an urgent message to Congress to process the tax reform filed in the first days of the Gustavo Petro government. By requesting an urgency, the process is cut short in Congress until the next September 15, the date on which the motion must be approved.

Ecuador

In the first half of 2022, the private sector increased its participation in the stock market with a view to obtaining financing. According to data from the Guayaquil Stock Exchange, paper trading increased by 15.3% compared to the same period last year. The stock market closed at US$7,011 million, which is 6.4% of the national GDP.

Guatemala

On 8 August, the route was enabled at 15.5 km, Vila Nueva, which was blocked for almost two months due to a collector collapse and a geological fault.

Honduras

The National Congress, with 44 votes, approved the loan agreement signed through the Ministry of Finance to the Central Bank of Honduras and the Government of the Republic for an amount of US$1,000 million.

Mexico

Deputy Governor Jonathan Heath said Mexico’s central bank is likely to follow in the footsteps of the US Federal Reserve Banksicos, matching the Fed’s previous two 75 basis point hikes and raising its interest rate to a maximum of 8.5% last week. Is. Mexico’s central bank traditionally emulates the Fed’s rate hikes to prevent large amounts of capital from leaving the country and weakening the peso.

Peru

The head of Peru’s Ministry of Economy and Finance, Kurt Berno, rejected this Friday that the government studies a new phase of a loan scheme for reactive Peruvian companies, with minister Roberto Sánchez saying President Castillo is considering the possibility. Were.

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