2023-07-12 21:38:00
The Chilean stock market climbed to an unprecedented mark and Wall Street to its highest level in 15 months this Wednesday following the downward surprise in the latest US CPInews that pushed down market rates globally, although it is estimated that the Federal Reserve will carry out a monetary tightening at its next meeting.
The S&P IPSA climbed 1.39% to 6,078.57 points at the close of the Santiago Stock Exchange, being the first time in history that the index closed above 6,000 points, and in what appears as a fourth consecutive day registering an all-time high.
Sonda (4.85%), Enel Chile (3.52%) and CAP (3.3%) they headed the rally which involved 26 of the 30 IPSA papers. The selective also surpassed for the first time the intraday mark of 6,013.31 points that it had registered on September 5, 2022.
In New York, technology stocks stood out: the Nasdaq advanced 1.15%, the S&P 500 rose 0.75% and the Dow Jones gained 0.25%. Both the Nasdaq and the S&P 500 reached highs since April 2022. Earlier, at the close of Europe, the regional Euro Stoxx 50 added 1.72% and London’s FTSE 100 expanded 1.83%.
“The main factor that allows local equities to outperform the S&P 500 is the expectation that the Central Bank of Chile will start lowering interest rates at this month’s meeting,” said the equity markets strategist. XTB Latam, Felipe Sepúlveda. Rate swap at 12 months it fell 10.0 basis points (bp) in a new general descent of the curve.
Betterplan’s commercial director, Joaquín Rhodius, highlighted that “in Chile, inflation is falling faster and the data has surprised us more downwards than in the US, with which there is room to lower rates much faster, generating better prospects for variable income”.
US economic activity increased slightly in recent weeks: Fed Beige Book
cooling in progress
The CPI showed an annual variation of 3.0% in the month of June, being one tenth lower than expected and the lowest since March 2021according to the US Bureau of Labor Statistics.
Special surprise generated core inflation -which is focused on the most fixed components of the basket-, with an annual change of 4.8%, which implies two tenths below the projection and a minimum since October 2021.
“Although the market had previously rallied in anticipation of favorable data, the immediate reaction in stock index futures suggested that the data was even better than what traders expected,” Charles Schwab bank said in its daily report.
US bonds reflected the prospect of looser financial conditions: he treasury at two years it fell 13.1 bp and the 10-year security fell 10.7 bp.
Knowing the data, the president of the Richmond Fed, Thomas Barkin, was in any case inclined to continue raising rateswarning that “if you loosen too soon, inflation comes back with a vengeance, requiring the Fed to do even more.”
“The market continues to price in a 25bp rate hike in July by the Fed. However, it is less convinced that the Fed will raise rates once more later in 2023,” the City Index senior markets analyst wrote. , Fiona Cincotta.
At the close of the close of the Asian market -long before the publication of the CPI-, Hong Kong’s Hang Seng rose 1.08%, but mainland China’s CSI 300 was down 0.67% and Japan’s Nikkei fell 0.81%.
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