E A Wild Day

We are back in reporting overload today after US jobless levels fell sharply last week, boosting markets, at least for today. The market is wild today. The Dow Jones opened up 200 points but that means this week was lower than last, the third week in a row with a loss in the major index. And then the tech rout resumed because interest rates rose. And the indexes all went into the red as 10-yr US treasury bond yields went back over 1.6%.

Now the Dow is back in the black for the day, up 250 points. BofA Merrill says to sit out the US corporate bond market because the Fed will have to deal with rising interest rates (which reduce bond prices.)

China set a 6% target for its economic growth in the current year and at 5% per year over the next 15, although it only grew 2.3% last year because of covid-19. However, most countries did not grow at all, so China aims to export more this year. Its good showing last year was thanks to the 15.43 trillion yuan growth in only 4 provinces, on its east coast, which accounted for 25% of growth.

Mexico will produce more green energy as the state electric company will bailout bust solar and wind farms. Opec restricted output to keep prices up, now over $65/bbl.

Business newspaper article

image source

*Mercado Libre's net Q4 revenues were $1.3 bn, a year-over-year increase of 96.9% in USD and 148.5% on an FX neutral basis. Commerce revenues increased 124.2% year-over-year reaching $872.9 mn, while Fintech revenues increased 59.5% year-over-year reaching $454.4 mn. Gross profit was $489 mn with a margin of 36.8%, compared to 45.7% in the fourth quarter of 2019. Total operating expenses were $514.2 mn, up 36% year-over-year. As a percentage of revenues, operating expenses were 38.7%, compared to 55.9% during the fourth quarter of 2019. Loss from operations was $25.1 mn, compared to a loss of $68.9 mn during the prior year. As a percentage of revenues, income from operations was -1.9%. Interest income was $22.6 mn, a 15.9% decrease year-over-year, as a result of lower interest rates in our investment as a consequence of the pandemic, mainly offset by higher interest income in Argentina due to higher float. MELI incurred $31.6 mn in financial expenses this quarter, mostly attributable to financial loans entered into 2020, mainly in Brazil and Argentina, and also incurred interest expenses from our trusts related to the factoring of our credit card receivables in Argentina.Q1 foreign currency losses of $9.9 mn mainly related to the difference between Argentina’s official exchange rate and the blue-chip swap rate at which it does stock repurchases in Argentine Pesos.

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William K. 1 month ago Member's comment

Intteresting and informative as always, V.L. And it seems that the news is rather encouraging as well. Thanks for the good article.