In this framework, the setbacks of the Argentine papers were led by View (-5.7%); Bioceres (-5.2%); and IRSA Commercial Properties (-3.8%). In turn, Mercado Libre fell 3.7%; YPF lost 2.3% and the banks lost up to 3.5%. Only Pampa Energía managed to finish on positive ground (+0.1%).
Added to the complex global outlook are investors’ doubts about rising inflation in Argentina that overshadows a recent agreement with the International Monetary Fund (IMF) to refinance some 45 billion dollars
All in all, the leading S&P Merval index of Argentine Stock Exchanges and Markets (BYMA) lost 1.5%, to 91,814.30 points, compared to an increase of 3.6% accumulated in the previous four rounds.
On the New York Stock Exchange the S&P 500 lost 1.2% to 4,525.76 while the Nasdaq fell 2.2% to 14,207.63. The Dow Jones Industrial Average fell 0.8% to 34,648.33.
At a conference, Federal Reserve Governor Lael Brainard said she hopes methodical interest rate hikes and rapid reductions in the Fed’s asset portfolio to bring US monetary policy to a “more neutral stance” later this year, with further tightening to follow as needed.
Brainard’s comments “have shown that the Fed is willing to be more aggressive,” said Kristina Hooper, chief global markets strategist at Invesco. “That is certainly having a negative effect on equities due to concerns that this will increase the likelihood of a recession,” Hooper said. “It’s going to get harder and harder for the Fed to engineer a soft landing the more aggressive it gets.”
Consequently, US Treasury yields rose to multi-year highs after Brainard’s comments.
The prospect of a more aggressive Fed led to a difficult start to the year for equities and, in particular, for technology and growth stocks, whose valuations will come under more pressure from rising bond yields.
The attention on the Fed will continue on Wednesday, when the central bank publishes the minutes of its March meeting.
“Latin America has little direct economic and financial relationship with Russia and Ukraine; however, the increase in energy prices and the new wave of supply shocks restrict access to agricultural and industrial commodities, which generates higher inflation and the probability of prolonging the tightening of monetary policy”, Moody’s Investors Service said.
In the fixed income segment, bonds denominated in dollars lost up to almost 2.5%, with declines led by the Overall 2038 (-2.4%); Global 2035 (-2.1%); and the Bonar 2035 (-1.7%).
While, the Argentine country risk rebounded 18 units, to 1,710 basic points, after marking the day before its lowest level since mid-December (1,692).
Source: Ambito
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