Saturday, December 4

For investors: What is the global and local panorama of the shares?


The banking sector was the hardest hit this week as the ADRs of Galicia, Banco Macro and Banco BBVA are still -11 / -19% below the Friday before the elections.

What is behind this correction? The political landscape with a more balanced Congress is in principle positive, but the internal noises within the governing coalition remain latent, as is the uncertainty regarding the agreement with the IMF.

Merval measured in CCL (YTD)

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However, the local equity market was not the only one to suffer this week. The rest of the world’s markets have also been going through a time of considerable uncertainty, such as Brazil, where he Bovespa sank 3.9% so far this week, deepening its downtrend that does not want to give way since June.

On the US side, the market is attentive to Uncertain prospects for the Fed, as more and more central banks around the world jump on the higher rate train. For now, JPMorgan predicts an interest rate hike by the Fed for September 2022.

However, there are encouraging indices, for example that the consumption data showed a recovery in October of 1.7%, exceeding market expectations of 1.4% (being the highest rise in the index since March). In addition, strong corporate earnings from consumer companies bolstered the data and eased concerns within the equity market about high inflation. Walmart, Home Depot and Lowe’s Cos were some of the names that presented higher Q3 results than expected by the market.

Bovespa vs S&P 500 (YTD)

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On the other side of the world, a fact to highlight were the results presented by Alibaba Group, the Chinese e-commerce giant. The net result, yielded 39% YoY (Year over Year), justified mainly by investment losses compared to the same quarter of 2020.

On the other hand, the company’s total revenue increased 29% over the previous year, but slowing down compared to last quarter’s data and remaining below analysts’ expectations. In addition, the company reduced its expectations of increasing tax revenues in 2022. At the beginning of the year they projected an increase of at least 29.5% of their tax total for 2021, and now an increase of between 20 and 23% is expected .

These negative data led to Alibaba ADR ($ BABA) posted a drop of 11.1% on Thursday.

In any case, although the expected sales growth for 2022 is below average, the profitability of BABA is in line with the sector and it is a company with more than 800 million active users.



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