2023-08-17 21:17:00
Global stock markets continued to fall this Thursday, as pressures on the cost of fiscal borrowing spread in the United States, whose 10-year bonds already register interest rates at maximums in more than 15 years.
Fixed income returns have soared globally, as perceptions grow that the US Federal Reserve will maintain its tightening monetary policy for longer than previously estimated. The trend was also driven by the decision of Fitch to cut the credit rating of the North American powerhouse at the beginning of the month.
The S&P IPSA fell 1.31% to 6,131.50 points at the close of the Santiago Stock Exchange, with which it exhibits its lowest score in a month. Falabella (-3.01%), Enel Américas (-2.91%) and Entel (-2.83%) showed the worst performances within the index.
A third of the amounts traded were concentrated in SQM shares, which totaled flows of $50,563 million. SQM-B (-1,85%) y SQM-A (-2,74%) pulled back following the lithium giant disappointed the market with second quarter results which were below the consensus estimates.
SQM’s earnings for the period were US$2.03 per share (a Bloomberg survey had pointed to US$2.52), comparable sales were US$2,052 million (US$2,230 million were expected) and the Comparable Ebitda was US$877 million (versus US$1,049 million expected).
“We highlight the increase in demand for electric vehicles in China and Europe, which should support a recovery in sales volume for the rest of 2023 in the lithium segment. However, the company lowered its production guidance from 200 thousand tons to a range between 180,000 and 190,000 tons by 2023,” said BICE Inversiones, which is keeping its recommendation on paper under review.
signs of debt
The Nasdaq fell 1.17% to its lowest level since June 9while the S&P 500 lost 0.77% and the Dow Jones fell 0.84% at the end of the day on the New York Stock Exchange.
“The Nasdaq led markets lower once more, with traders worried regarding the continued sell-off in US bonds, which pushed 10-year yields to their highest level since 2007,” StoneX financial writer Paul Walton noted.
The technological index accumulated a drop of 3.2% in its worst drop of three consecutive days since February.
Higher market rates hurt equities, as they allow companies to anticipate a higher cost of borrowing. The yield on a bond is inversely proportional to its price.
Walton noted that “US mortgage rates have reached 7%, with many analysts pointing to a high of 8%.” The reading of the Federal Reserve July meeting minutes led many to believe that short rates are headed higher to curb inflation.”
Indeed, US jobless claims were reported to have held steady this morning, another sign of strength in the labor market and wages, while the Philadelphia Fed’s business index posted an unexpected rebound in August. .
Walmart (-2,24%) lost ground, matching the general pessimism despite have exceeded the general forecasts in its last quarterly reportin addition to raising its earnings forecast.
At the close of Europe, the regional Euro Stoxx lost 1.32% and London’s FTSE 100 fell 0.63%. On the Asian side, Japan’s Nikkei fell 0.44%, Hong Kong’s Hang Seng was unchanged and mainland China’s CSI 300 rose 0.33%.
Analysts pointed to a weak auction of 20-year Japanese government bonds as one of the impulses that have catapulted market rates globally.
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