Joint
Today, U.S. and European stock markets closed in positive territory, while bond yields remained mixed, following upbeat corporate earnings and expectations of a faster global economic recovery.
In the US, stocks consolidated a positive trend, extending their rally for a third consecutive day. The market remains hopeful about the $19 trillion COVID-1.9 relief bill, as the Senate opted for measures that would allow Democrats to pass Joe Biden's package without Republican support. Additionally, Wall Street was on the rise after Alphabet rallied after posting strong quarterly results, while Amazon shares were hit by Jeff Bezos' surprise decision to resign. Meanwhile, Janet Yellen called a meeting this week with the Securities and Exchange Commission and the Federal Reserve to discuss market volatility fueled by the retail trading frenzy in GameStop, silver, and other stocks that were favored on social media. On the other hand, among the most significant news on the economic agenda, OPEC makes no recommendations on oil production levels following its ministerial meeting. Furthermore, the Markit Services PMI rose to 58.3, while the ISM Services PMI unexpectedly increased to 58.7 in January. Finally, a survey conducted by the Federal Reserve showed that 95% of small US businesses with fewer than 500 employees reported that the coronavirus had impacted their business.
Fixed rent
The debt market in emerging markets was positioned in mixed territory, thanks to the increase in COVID-19 cases in Latin America. In Brazil, the yield on 10-year bonds fell 29.9 bps to 7.286% after President Jair Bolsonaro said his legislative agenda priorities were the privatization of state-owned companies, central bank independence, and administrative and fiscal reform. Santander Brasil SA beat fourth-quarter earnings estimates on Wednesday, with net income rising 6.2% to 3.958 billion reais. In Mexico, the 10-year bond yield rose 3,0 bps to 5.270% after a day where cases continue to rise, particularly in states that attracted tourism during the holiday season. Meanwhile, Mexico's Supreme Court ruled in favor of an antitrust challenge to the energy ministry's measures seeking to strengthen the national electric company. This ruling is a setback for the current president's administration, which is trying to reverse the previous administration's energy sector liberalization. In Colombia, Bonds had a positive day, where the TESTF24 decreased 3.50 bps with a nominal value of COP$273.500 billion, as did the 10-year yields, which also decreased 2.20 bps with a nominal value traded in the spot market of COP$84.000 billion in the SEN market. Influenced by the monetary policy report of the Bank of the Republic, the bank's technical team lowered the estimate of Gross Domestic Product (GDP) growth for this year to a range of between 2% and 6%, from a previous projection of between 3% and 7%. The technical manager of the Bank of the Republic, Hernando Vargas, highlighted that within the growth projections for 2021, this would be 4,5%.
Variable income
Local equities closed Wednesday's session in negative territory, with the Colcap index posting a -0.68% drop to 1,359.03 points. Shares of Banco de Bogotá, Bancolombia, and GEB led the negative performance within the benchmark basket, posting declines of 2%, 28%, and 1.93%, respectively. Meanwhile, shares of Grupo Aval, Pref. Corficolombiana, and Cemargos led the gains among the stocks that bucked the downward trend within the benchmark basket, posting gains of 1.67%, 1.97%, and 1.65%.
Money Exchange
The Colombian peso (COP) depreciated 0.14%, reaching $3,533.31 pesos per dollar, trading at US$807 million. This was despite the dollar's downward trend at certain points during the day, although it reached year-to-date highs. However, this volatility was not enough to sustain the appreciation seen the previous day. There is still some uncertainty regarding the local economic recovery due to high daily infections despite the lifting of several restrictions in major cities. Additionally, the positive performance of Brent crude oil prices limited losses. The pair finally reached a high of COP$3,544.50 and a low of COP$3,510.00, and the current Representative Market Rate for Thursday will be COP$3,521.
US stocks closed higher after midterm election results came in line with market expectations. Democrats will retain control of the US House of Representatives, giving them political control over President Trump, while Republicans have gained control of the Senate. With this reduced uncertainty, markets reacted positively.
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