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Brazil Saves the Day for Latin America

Brazilian and Latin American markets were mixed to higher on the Friday (May 6) session, on stronger-than-expected U.S. employment data, although upward momentum both domestically and in the U.S. waned as markets drew to a close.

Still, the jobs report boosted sentiment that the U.S. economy may be better off than previously thought, which in turn keeps investors bullish on emerging markets.


Brazil’s benchmark Bovespa Index advanced 153.38 points, or 0.60%, while Mexico’s benchmark Bolsa Index slipped 4.08 points, or 0.03%. Argentina’s Merval Index declined 8.72 points, or 0.61%.


In U.S. economic headlines, non-farm payrolls rose by 274,000 in April, while the unemployment rate was unchanged at 5.2%. Economists had expected payrolls to increase by 175,000 and unemployment to hold steady at 5.2%.


Brazilian shares posted solid gains on the session, as traders were upbeat on the U.S. labor figures.


In domestic economic reports, the IBGE statistics institute announced that industrial production jumped 1.5% in March from the prior month, and 1.1% from the year-ago period.


Meanwhile, industrial output growth was 3.9% in the first quarter, a slowdown from the prior quarter’s 6.3% growth rate.


In corporate headlines, Unibanco announced a partnership with Makro, a wholesaler and discount retailer, in which it will provide consumer credit lines to approximately 1.4 million Makro customers.


Within the airline group, GOL said that it completed a global offering of shares totaling 593.7 million reais. 7.72 million shares were sold through a primary offering, while 9.18 million shares were sold through a secondary offering.


Mexican receipts were little changed on the day, as there were few news items to direct trading. Still, TV Azteca was active, after the president and chief executive of Azteca America said in an interview with Dow Jones Newswires that its expanded coverage could help lift U.S. revenues by more than 25% this year.


Meanwhile, Argentina moved lower on the session, amid first-quarter earnings reports. On that front, flat steelmaker Siderar announced a higher first-quarter net profit of 417 million pesos, compared with 205.7 million pesos in the year-earlier period.


Revenues surged to 1.18 billion pesos from 787.4 million pesos last year. Siderar said that higher steel prices and a jump in exports boosted results.


Elsewhere, generator Central Costanera said that its first-quarter profit edged up to 34.8 million pesos from 32.5 million pesos in the corresponding period a year ago.


Net sales advanced to 196.2 million pesos from 124.6 million pesos, although operating costs also leapt, as a natural gas shortfall led the firm to use more expensive alternative liquid fuels.


Thomson Financial Corporate Group
www.thomsonfinancial.com

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