The market welcomes the pro-market elected President.
For many months, during the campaign, we had to put up with Globalists of all stripes warning anyone who’d listen about the ‘danger’ of electing ‘anarcho-capitalist’ Javier Milei to the Presidency of Argentina.
However, after his LANDSLIDE victory yesterday, today investors are ‘voting with their money’, and the result is what we expected: Argentinian stocks and bonds are BOOMING.
It is also true that there’s downward pressure on the peso currency, after all, Milei has vowed to ditch it in favor of the US dollar.
His policy is to ‘take a chainsaw to public spending’, ‘burn down’ the central bank – and guess what: investors are into it!
It may be symbolic that this is happening on Argentina’s ‘Day of the National Sovereignty’.
Reuters reported:
“The South American country’s markets are closed on Monday for a local holiday. But its overseas dollar bonds, which largely trade deep in distressed territory near 30 cents on the dollar, rallied more than 2 cents in early trading before retracing some gains, according to MarketAxess data.”
Investors are happy with the outcome, and this upward trend could intensify after Milei announced his cabinet.
“JPMorgan, in a note to clients late on Sunday, said it would not change its recommendation on Argentina’s international bonds from its measured ‘market weight’ stance while it awaited clarity on his policy path and ability to enact his plans.
[…] Milei, who will not take office until Dec. 10, did not refer to “dollarization” in his first speech, raising questions about how quickly he might pursue scrapping the peso entirely.
He did pledge rapid reforms to fix an economy mired in crisis. Inflation is at 143%, foreign currency reserves are more than $10 billion in the red and a recession is looming. He also signaled moderation and thanked his mainstream conservative backers Mauricio Macri and Patricia Bullrich.”
Milei’s blowout vote take of 56% in the run-off, after he got 30% in the first round vote last month, give him quite the mandate.
But he still faces a Congress where his bloc only holds a small share of seats.
Bloomberg reported:
“US-listed shares of Argentine companies soared Monday, with oil company YPF up as much as 34% on bets the maverick outsider will reverse years of disastrous policies that have the country headed to its sixth recession in a decade with annual inflation raging at 140%.
[…] Benchmark sovereign dollar bonds climbed, though were off their highs of the day as US trading opened. Notes due 2030 added 0.8 cent to 31.25 cents on the dollar, the highest price in two months. They jumped as much as 1.9 cent earlier.
The Global X MSCI Argentina ETF jumped as much as 13% in US trading, the biggest intraday advance on record. Trading volume was about 10 times the 20-day average for this time of day.
[…] ‘Today is the beginning of the end of Argentina’s decadence’, he said. “We’ll start doing things that history has shown works, and within 35 years, we’ll return to being a world power.”
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