Latin American Markets Mixed; Brazil Stocks Slump Ahead of Expected Rate Cut Today


Latin American markets are mixed, with the Brazilian Ibovespa market index down nearly 2% with the country's central bank widely expected later today to cut its policy interest rate by another 0.5% to 7.5%. That would mark the ninth consecutive rate reduction. The country's central bank already cut interest rates by 5%.

Also, Argentina's government, unions and industry leaders yesterday agreed to raise the minimum wage by 25% as inflation shows few signs of cooling despite a slowdown in Latin America's No. 3 economy. The minimum salary will rise in two stages to 2,875 pesos a month (US$621) from the current 2,300 pesos a month, although the full pay hike will not take effect until February. It is the ninth straight year the Argentine government has increased the minimum wage.

Here's where the regional markets stand this afternoon:

- Ibovespa down 1,019.12 (-1.7%) to 57,387.28.

- IPC (Mexico City) up 98.20 (+0.25%) to 40,049.40

- Santiago Index IPSA up 3.18 (+0.08%) to 4,160.96

- Merval Buenos Aires down 5.64 (-0.23%) to 2,441.62

In company news, Vale SA ( VALE ) ADRs are down nearly 4% and have hit new year lows. But its not alone as many miners are lower. Equipment supplier Joy Global ( JOY ) is down albeit about $3 above day lows as it reported weaker than expected Q3 results and slashed its full-year earning guidance.

JOY cut its FY12 profit outlook to $7.05 to $7.20 a share from its previous forecast for per-share earning in a range of $7.15 to $7.45. The Street is at $7.26 a share. The company earlier cut its sales guidance, citing the ongoing switch from coal to natural gas as an energy source cutting into demand for electric shovels, blasthole drills and other mining equipment.

Caterpillar ( CAT ) has lost 1% and Rio Tinto ( RIO ) slumped near 3%

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities

Referenced Stocks: CAT , JOY , RIO , VALE

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