Stock markets posted heavy losses globally on Wednesday, mainly on Wall Street, where they had their biggest slump in almost two years, dragged down by falls in retail sector issuers such as Target and Walmart, following reports that they have been hit by higher costs. , which accentuated concerns regarding economic growth, given the increase in interest ratesand by inflationary pressures, which are not going to subside in the short term.
The Dow Jones and the S&P 500 They fell 3.57 and 4.04 percent, respectively, and this was their worst day since June 2020, while the Nasdaq lost 4.73 percent, its biggest drop since May 5.
“Concern arose as Target followed Wal-Mart yesterday with a large profit loss, margin compression and cautious outlook, citing rising costs and changing consumer spending patterns,” Investrade analysts said.
They highlighted that the falls in these stations were the largest since “Black Monday” in 1987, which had a domino effect on the market.
The shares of self-service companies such as Walmart, Costco and Target had decreases of 6.8, 12.5 and 24.9 percent, respectively.
Stefanos Bazinas, NYSE Execution Strategist, He noted that retailers are being affected by higher costs, which was expected given recent inflationary pressures, but said this is causing changes in consumer habits, and that seems to be what the markets are focusing on.
“Trends cited by both retailers point to consumer spending moving away from durable goods and branded general merchandise and toward staples,” he noted, adding that equity markets are reacting aggressively to these trends. topics.
The Dow Jones Industrial suffered its worst loss since 2020 as investors doubt the Fed can pull off a soft landing as the inflation outlook might warrant a much more aggressive tightening of monetary policy. , Edward Moya, Analyst at Oanda.
Impact not yet reflected in Mexico
In Mexico, the Index of Prices and Quotations fell 2.08 percent to settle at 50 thousand 394.03 points, while the FTSE BIVA It ended in 1,041.14 units with a decrease of 2.06 percent.
For both indices it was his biggest loss from April 29.
Analysts mentioned that for the moment the impacts of high inflation on the costs of Mexican companies have not been reflected in such an important way as what has already been observed in the United States, since local retail sales data have reflected that consumption still grows higher than inflation.
“What we saw is not something that suggests that the economy is going to slow down more, but rather that the impact that inflation and the economic slowdown in the United States are having is affecting more than expected the profits of consumer companies in the United States. that country,” said Enrique Mendoza, director of fundamental analysis at Actinver.
He considered that the situation in Mexico is different, since strong consumption has still been seen here, but also the reports for the first quarter in general remain solid.
Carlos González, director of stock market analysis and strategy at Monex, indicated that in the first quarter the companies began to reflect pressure on margins, however, it was not so evident.
He pointed out that it is expected that in the following quarters there will be a much more direct impact on the margins of the companies, since on the one hand there will be an increase in costs and on the other, an impact on purchasing power due to inflation.
He added that the reports that have been presented in the United States show precisely that weakness of some companies, so fears will continue in the financial markets, both in Mexico and the United States.
On the other hand, bitcoin is trading at a price of 29 thousand 1.77 dollars, which means a drop of 3.61 percent compared to Tuesday.
Weight ‘flatters’
The peso depreciated yesterday 0.44 percent to 20.0514 units per dollar, following three consecutive days of gains in which it managed to break the floor of 20 units.
“The US dollar closed firmly higher on Wednesday, on track to break a three-session losing streak. Rising inflation has hit sentiment following yesterday’s WSJ interview with Federal Reserve Chairman Jerome Powell, who took a more hawkish tone,” analysts at OctaFX noted.
Oil trending negative
El West Texas Intermediate (WTI) fell 3.69 percent to sell at $109.06 a barrel, and the Brent It fell 2.85 percent to a price of 109.18 dollars per barrel.
“There are signs of a reopening in China, and new concern in Libya, where Prime Minister Abdul Hamid Dbeibé had to flee Tripoli under pressure from other warring factions. This might affect the supply of oil from this country. Meanwhile, the European Union announced that it will invest €300 billion over the next 8 years, to end its dependence on Russian crude,” commented Ben Laidler, Global Strategist at eToro.
The price of gold is positioned at 1,816.65 dollars per ounce with a marginal increase of 0.08 percent, while silver was quoted at a price of 21,405 dollars per ounce, a decrease of 1.05 percent.
falling bonds
In the United States, the rate on 10-year Treasury notes fell 10.2 basis points to 2.88 percent. In Mexico, the 10-year M bond rate showed a drop of 2.5 basis points, standing at 8.87 percent.
