Latin American indices lose ground on a negative day globally; Brazil stands out

Stock markets in LATAM have been shaken by signals from the fixed income sector, with the benchmark bond yield in the US reaching its highest interest rate since November.

On Tuesday, Latin American indices and New York stock markets were down in the second day of a new quarter that already shows signs of increased uncertainty, amid doubts about when the Federal Reserve will begin the anticipated monetary easing cycle.

The S&P IPSA, Chile’s main index, fell by 0.65% to 6,594.49 points, with shares of SQM-B (-2.4%), Concha y Toro (-1.82%), and SMU (-1.47%) leading the declines within the Chilean index.

This adds to the case of Argentina with a close to 2.5% drop on Wall Street, and Mexico, with a decline of approximately 0.5%.

Brazil is the exception on the continent, with a slight increase of 0.4%. Meanwhile, the Brazilian Real, BRL, remained flat.

On Wall Street, the Nasdaq Composite lost 1.24%, the S&P 500 0.98%, and the Dow Jones 1.21%, extending the previous day’s decline. Tesla (-5.11%) fell sharply after reporting its first year-on-year sales decline since 2020.

Signals from the fixed income market are shaking the stock market. The 10-year Treasury bond jumped 4.6 basis points to an interest rate of 4.36% – the highest since November – while the two-year bond traded flat. The persistent rise in oil added pressure on borrowing costs.

For bullish market participants, it may be difficult to justify buying stocks at these elevated levels as yields rise.

Mid-morning, February job openings in the US brought mixed signals. They were slightly higher than expected and rose from the previous month, but the latter was due to downward revisions. The job openings-to-unemployed ratio fell from 1.43 to 1.36 times.

The next events of interest are a series of public comments from Fed members. This will provide investors with insight as they await the official employment report, to be released on Friday in the world’s largest economy.