|
Latin American markets declined, as investors took some profits after the major regional indices broke record highs in several consecutive sessions. News that the U.S. Federal Reserve had raised interest rates and seems poised to continue doing so also weighed.
Brazil's benchmark Bovespa Index fell 17.03 points, or 0.06%, while Mexico's benchmark Bolsa Index dropped 93.37 points, or 0.60%. Argentina's Merval Index shed 5.76 points, or 0.35%.
Weighing on North and South American shares, the U.S. Federal Reserve hiked interest rates by 25 basis points to 3.75%. The Fed found that the devastation caused by Hurricane Katrina and a surge in oil prices imply that "spending, production and employment will be set back in the near term." Yet, the central bank does not believe these developments will pose a "more persistent threat."
Further, while higher energy costs have the potential to add to inflation pressure, core inflation has been relatively low in recent months and the longer-term outlook for inflation remains tame.
As a result, the Fed anticipates removing its policy accommodation at a pace "likely to be measured," contrary to some market players' expectations that the central bank would pause in its rate hiking policy in the aftermath of the hurricane.
In other U.S. data of note, housing starts dropped by 1.3% in August, following a 1.5% decline the prior month, and compared to estimates for a decrease of 1.1%.
Brazilian shares eased back on profit-taking following the U.S. Fed announcement. Yet, on the home front, inflation data continued to be benign. The consumer price index for São Paulo rose 0.03% in the four weeks ended September 15, versus a drop of 0.11% in the prior reading, and in line with expectations.
Meanwhile, the Getúlio Vargas Foundation showed a slight decline in prices nationwide of 0.54% in the first ten days of September, meeting projections as well.
In other reports, a study by the Partner Consulting Group predicts that consumer credit availability in Brazil could reach 312 billion reais, or 12% of GDP, by 2015, reported news services.
In corporate news, a federal auditing court found preliminary indications of irregularities in contracts between Petrobras and supplying companies, including irregular pricing and overbilling.
Elsewhere, meatpacker Sadia unveiled plans late yesterday to invest 1.5 billion reais in its local businesses, building new plants, between 2006 and 2009.
Mexican issues, meanwhile, retreated as well, after breaking record highs in recent sessions. In the spotlight, on the corporate front, steel-processing firm G Collado reported that it had been holding talks to be acquired by Ternium, the regional steel group recently launched by Argentina's Techint.
In research news, an investment bank reinstated media giant Televisa with a "buy" rating and a US$ 85 price target, citing its strong management team and its positioning versus the competition.
Argentine stocks ended flat to lower, in line with regional peers, and amid soft primary surplus data. The surplus for August totaled 1.846 billion pesos, below expectations of 1.9 billion pesos. On the bright side, the number of people in registered private-sector jobs grew in August by 1.1% from the prior month, or 9.5% from the prior year.
Thomson Financial Corporate Group - www.thomsonfinancial.com
 |
Subscribe to this comment's feed
Brazil received a huge boost in its international image with its selection as the host of the 2016 Olympics, but it was really just the cherry on top of the overall recognition of the country's ascension to the ranks of one of the world's most important countries. Now, as it finally takes its place on the world scene, there has been a great deal of concern about what kind of image Brazil hopes to project, now that the world is really paying attention. 
The only good thing to say about the visit to Brazil of Iran's president, Mahmoud Ahmadinejad, on Monday November 23, is that it was mercifully short and lasted less than 24 hours. Ahmadinejad had his picture taken being hugged by president Luiz Inácio Lula da Silva who gave him a warm welcome and said Iran had every right to develop nuclear energy for peaceful purposes. 
The small, coastal town of Condé is located just a twenty minute's drive from João Pessoa, the capital of Paraíba. The Northeast of Brazil has historically been a place of encounter and mixing between peoples. For millenia groups of indigenous people fished, farmed, migrated and sometimes fought along this large, fertile area. 
The Brazilian diplo-MÁ-cia (bad diplomacy) carries on its accelerated course towards the non-acknowledgment of human rights, although sometimes it takes pleasure in saying that it does precisely the opposite. The visit of Iran's president, Mahmoud Ahmadinejad, is another example of a diplomatic omission that verges on hypocrisy. 
On July 4, 2006, representatives of Argentina, Brazil, Paraguay and Uruguay met in Caracas to sign the protocol for the entrance of Venezuela into the Southern Common Market (Mercosur). After two and a half years, the protocol was approved by the legislative bodies of Argentina and Uruguay, and as of now it may be only days away from being ratified by the continent's economic megalith, Brazil. 
Some sectors of the fight against AIDS have suggested that Thabo Mbeki, the former president of South Africa, committed genocide through his absence from the fight against the illness in his country throughout his two terms. 
One hundred and eleven years after Brazil abolished slavery, the number of workers deprived of their freedom is still huge. They raise cattle, produce charcoal, sugar cane or timber. Some of them, most undocumented Bolivians, work in basements of small apparel factories in São Paulo and other metropolis. 
On November 7, 2009 a few friends and I had an opportunity to take a look inside a Brazilian jail outside the city of Rio de Janeiro. We were able to take some amateur footage of our experience on video (see link below). It's no surprise, of course, that the typical Brazilian jail lacks some of the functionality of those in North America or Europe, but our experience that day was quite shocking. 
Depletion of the Amazon Rainforest is not a new concern facing environmentalists, biologists, ecologists, and a growing number of the Amazonian indigenous peoples. For decades they have feared for the fate of the world's most biologically diverse and species-rich hothouse. 
Geisy Arruda made history this week in Brazil, but for all the wrong reasons. What began as a poorly planned fashion statement has become a worldwide tale. Geisy decided to wear a pink mini-dress to her private college in São Paulo state, and after that, all hell broke loose.