On Wednesday, Chilean socialist presidential candidate Gabriel Boric, who is polling as the front-runner ahead of a run-off vote on Dec. 19, touted his proposals for a national lithium company and lambasted the Andean country’s “historic blunder” of privatizing its resources.
Chile is the world’s second-largest producer after Australia and has been a regional pioneer in market-friendly policies and privatization in recent decades. Albemarle Corp and SQM, a local business, are two of the country’s largest mine operators.
“Chile cannot repeat the historic mistake of privatization resources, and to that end, the National Lithium Company will be established,” Boric tweeted. He claimed that the move would help create jobs and give the goods a “Chilean seal.”
Boric had earlier mentioned ideas for a state lithium corporation in his campaign platform but remained relatively silent on the subject in the run-up to the Nov. 21 first-round vote, in which he came in second place. Boric will face far-right candidate Jose Antonio Kast in the run-off, with polls indicating that the leftist has a significant advantage.
Chile is also the world’s top copper producer. Politicians are debating whether to increase royalty payments to mining companies to boost state finances and fund social spending in the wake of the COVID-19 pandemic.
Colombia’s, Chile’s, and Peru’s stock markets have all agreed to merge:
The Colombian, Chilean, and Peruvian stock exchanges have agreed to consolidate into a regional holding company, creating Latin America’s second-largest stock market. The holding company, whose clearance by each country’s regulator is still awaiting, would be domiciled in Chile, according to a joint statement released late Monday by Colombia’s financial agency.
The Chilean exchange will own 40% of the holding firm, the Colombian trade another 40%, and Peru’s sale the remaining 20%.
In a video, Juan Pablo Cordoba, the director of Colombia’s stock market, stated, “The boards of the three countries have today approved this merger; therefore, we are giving our best for this tremendous success.” He said, “This integration will include shifting boundaries and keeping a wider picture in mind for the growth of Colombia’s and the region’s capital markets.”
According to the release, the merger will be based on an average stock market valuation of $259 million for Chile, $248 million for Colombia, and $138 million for Peru. The long-awaited integration will expand the number of debt issuers, attract foreign involvement, boost regional pension fund investment, and raise derivatives activity.
“Through the standardization of business models and the creation of technological and operational synergies, we may achieve a higher expansion of the regional market,” the statement stated. According to the exchanges, the holding company’s income growth will be 47 percent larger than the total of the three different exchanges’ growth.
Oil prices recover some of their losses as OPEC+ agrees to extend its current policy of increasing output in January:
Despite mounting concerns about energy demand from the appearance of the omicron strain of coronavirus, Crude-oil futures reversed much of their losses. On Thursday, a group of major oil producers decided to roll over their present production policy and enhance output at the start of next year.
On Thursday, the Organization of Petroleum Exporting Countries and Their Allies (OPEC+) decided to keep its current strategy and boost monthly production by 400,000 barrels per day in January.
“Demand fears were already on the increase, and the last thing crude oil bulls wanted to hear was another rollover of the current strategy from the OPEC+ group,” Fawad Razaqzada, market analyst at Think Markets, said in a market update.
“However, contrary to some expectations for only a moderate or no raise in January, that is what transpired.” According to Razaqzada, OPEC+ will be “providing more oil to the world supply and so fully eliminating the fear of supply shortages at a time when demand is predicted to plummet.”
In a release, OPEC+ said the conference will go on “pending further developments of the pandemic” and that it will “continue to oversee the market and make fast changes if required.”
“By proceeding with production increases despite a 20% drop in prices, OPEC+ has effectively removed political pressure from the United States and other consuming nations,” she said.
“Secondly,” Babin explained, “OPEC+ is under no duty to deliver these production increases.” “OPEC+ has yet to fulfill their targets for any of its promised increases over the last six months, keeping the market highly tight.”
On the New York Mercantile Exchange, West Texas Intermediate crude for January delivery CLF22, -0.59 percent CL00, -0.59 percent was down 29 cents, or 0.4 percent, at $65.28 a barrel after trading as low as $62.43.
WTI, the U.S. oil benchmark, has dropped more than 4% this week as concerns about crude uptake and OPEC+’s near-term strategy have weighed on prices. The most significant monthly drop in front-month WTI was in November when it fell 21%.
For the time being, oil prices are recovering from session lows “as the market realizes this decision is rather shrewd, indicating that OPEC+ is playing chess, not checkers,” according to Rebecca Babin, the senior energy trader at CIBC Private Wealth U.S.
Meanwhile, on ICE Futures Europe, February Brent crude BRNG22, -0.83 percent BRN00, -0.81 percent, the global benchmark, was down 39 cents, or 0.6 percent, at $68.48 a barrel, following a 0.5 percent drop the day before and a 5.5 percent drop the day before.
New limitations imposed by countries to battle a new coronavirus strain are feared to hurt demand for energy goods. As per Rystad Energy, the latest omicron variation of COVID-19 could cost the global oil market up to 2.9 million barrels per day (BPD) in demand in the first quarter of 2022, bringing the total predicted demand down from 98.6 million BPD to 95.7 million BPD.
“Oil consumption might decrease from a predicted 99.1 million BPD to 97.8 million BPD in December 2021 alone – a loss of 1.3 million BPD,” Rystad Energy calculates, “if the variation spreads fast, resulting in an increase in COVID instances and the restoration of lockdowns.”
January gasoline RBF22, 0.06 percent added 0.2 percent to $1.955 a gallon on Nymex Thursday, while January heating oil HOF22, 0.33 percent gained 0.6 percent to $2.089 a gallon.
Natural-gas futures rose somewhat ahead of the Energy Information Administration’s weekly report on the commodity’s supply in the United States. According to economists surveyed by S&P Global Platts, the EIA is likely to announce a 59 billion cubic feet drop compared to a five-year average reduction of 31 billion cubic feet.
In January, natural gas NGF22, 0.14 percent, increased 0.4 percent to $4.273 per million British thermal units.
The S&P 500 and the Dow Jones Industries Average are both increasing in the United States, owing to a boost from financials and Boeing:
The Dow and S&P 500 rose on Thursday, helped by banking stocks and Boeing, while mounting instances of the new Omicron type throughout the world continued to cause market instability. Boeing Co rose 3.5 percent after China’s aviation authorities issued an airworthiness order for the 737 MAX planes, paving the path for the model’s return to service in the country.
Kroger Co. soared 9.9% to lead the S&P 500 after the retailer upgraded full-year sales and profit expectations, bolstered by solid grocery demand.
All 11 main S&P sectors climbed in early trade, with eight of them gaining more than 1% apiece. Financials topped the group with a gain of 2.3 percent. Due to rising anxiety over the new coronavirus strain and the Federal Reserve’s hawkish statements, Wall Street’s main indexes fell below critical technical levels on Wednesday, with the Dow breaching its 200-day moving average for the first time since July 2020.
“It’s a ‘buy the drop’ environment,” said Sam Stovall, chief financial analyst at CFRA Research in New York. “Uncertainty will linger over the next week or two as scientists do further investigations over the new variation.”
“I believe investors still want to focus on stocks; all they need is a compelling reason to do so.” Investors rushed for bargains following every drop on Wall Street this week. Despite this, the three indexes are all losing ground every week, with the Dow on course to decline for the fourth week in a row.
As the Omicron form shook markets, fearing it might strangle a modest economic recovery from the epidemic, the U.S. and Germany joined nations across the world in contemplating harsher COVID-19 restrictions.
The CBOE volatility index, dubbed “Wall Street’s Fear Barometer,” was the last trading at 28.6 points, up from 28.6 the day before. At 10:27 a.m. ET, the Dow Jones Industrial Average had gained 462.69 points, or 1.36 percent, to 34,484.73, while the S&P 500 had gained 43.36 points, or 0.96 percent, to 4,556.40.
The Nasdaq Composite Index rose 31.90 points, or 0.21 percent, to 15,285.96, thanks to Amazon.com, Tesla Inc, Microsoft Corp, and Nvidia Corp. Apple Inc. dropped 2.7 percent after Bloomberg reported that demand for Apple’s iPhone 13 was decreasing. Meanwhile, in a last-ditch effort to prevent a partial government shutdown this weekend, senators secured a deal to finance the U.S. government until Feb. 18.
Strong economic growth and stellar profit reports have propelled U.S. equities to new highs in November, with the S&P 500 up 20.1 percent so far this year. According to a Reuter survey of equities analysts, a correction is predicted in the following six months, with the benchmark expected to rise 7.5 percent to 4,910 by the end of 2022.
On the NYSE, advancers outpaced decliners by a 2.63-to-1 ratio, while on the Nasdaq, advancers outnumbered decliners by a 1.43-to-1 ratio. The S&P 500 index reached three new 52-week highs and nine new lows this week, while the Nasdaq reached seven new highs and 393 new lows.
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