2024-11-20 20:51:00
In the local market, sovereign bonds rose an average of 1.3%, with the country risk index at 745 points, and YPF rose 3% after announcing a historic investment. MEP fell to $1,070, while BCRA accumulated $3 billion in purchases over 36 rounds. The trade surplus in October was US$888 million, and Wall Street exports increased 30% year-on-year, but the S&P 500 (-0.7%) and Nasdaq (-1%) fell due to geopolitical tensions and weak corporate performance.
local
Despite underperformance at the international level (Emerging -0.2%), HD sovereign bonds rose again (1.3% on average). So far this month, the average growth rate has reached 12.7%, with GD41 growing at 16%. The improvement coincided with a decline in country risk, which closed at 745 basis points, signaling a more favorable view of Argentina’s debt.
In the corporate space, YPF announced the largest private investment in the country’s history, which boosted its shares, up +3% on Wall Street. More than $2.5 billion will be invested to double oil exports; Pan American Energy, Vista, Pampa Energía, Pluspetrol, Chevron and Shell will also participate. This project alone could generate approximately $21 billion in exports starting in 2028.
dollars and reserves
The financial dollar is down again, with MEP already running at $1,070 and CCL looking to rise to $1,100. BCRA purchased $50 million in today’s financing and has had a positive balance ($3 billion in purchases) for 36 consecutive rounds. On the other hand, total reserves increased by $213 million to exceed $30 billion.
The trade surplus in October was US$888 million, and the cumulative surplus for the whole year was US$15.955 billion. Exports increased by 30% annually, and agricultural manufactured products were the main reason for export growth (annual increase of 69.7%). Double earnings remain strong.
international
U.S. stocks fell on Wednesday, with the S&P 500 down 0.7%, the Dow Jones down 110 points and the Nasdaq down 1%, as traders digested earnings reports and focused on escalating tensions between Ukraine and Russia. Target shares fell 21% in early trading on disappointing quarterly results and a cut to its full-year profit forecast, while TJX Companies fell 1.7% after it cut its full-year forecast.
Additionally, Qualcomm shares fell more than 6% as new car and PC targets failed to pull investors away. Finally, Nvidia shares fell nearly 2% before releasing earnings after the close.
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What are the main factors contributing to the recent recovery of Argentina’s sovereign bonds?
**Interview with Dr. Lucia Ramírez, Economic Analyst**
**Host:** Welcome, Dr. Ramírez! Thank you for joining us today to discuss the recent developments in Argentina’s financial markets, especially regarding its sovereign bonds and the significant investment by YPF.
**Dr. Ramírez:** Thank you for having me! It’s an exciting time for Argentina despite the global economic challenges.
**Host:** Indeed! Let’s start with the recovery in Argentina’s sovereign bonds, which rose an average of 1.3% recently. What do you attribute this improvement to?
**Dr. Ramírez:** The rise in sovereign bonds is largely influenced by a combination of factors, including a decline in the country risk index, which recently closed at 745 basis points. This reduction indicates a more favorable perception of Argentina’s ability to service its debt. Additionally, there’s been a noticeable growth in bond prices throughout November, with an average increase of 12.7% so far this month. Investor confidence is key here, especially against a backdrop of local economic data showing a trade surplus of $888 million in October.
**Host:** You mentioned the trade surplus. How significant is that in the current economic climate?
**Dr. Ramírez:** Quite significant, actually! A trade surplus strengthens the country’s financial position, allowing for more foreign currency inflow. It indicates that Argentina’s exports are performing well, especially with a 30% year-on-year increase in Wall Street exports. This environment supports investments and makes the market less volatile, contributing to the rising bond prices.
**Host:** Speaking of investments, YPF announced a historic $2.5 billion investment aimed at doubling oil exports. What impact do you foresee this having on the company and the broader economy?
**Dr. Ramírez:** This investment is pivotal! It’s not just the largest private investment in Argentina’s history but also a major boost for the oil sector, attracting participation from significant players like Chevron and Shell. It is expected to enhance Argentina’s export capacity significantly, thereby generating jobs and increasing foreign investment. Moreover, YPF’s share price already reflected this optimism with a 3% increase. Such initiatives create a ripple effect throughout the economy, fostering growth and stability.
**Host:** That sounds very promising. However, we also see some concerning trends in the international markets, particularly with the S&P 500 and Nasdaq dipping. How do these global dynamics affect Argentina?
**Dr. Ramírez:** Argentina is indeed feeling the effects of global economic fluctuations. The declining S&P 500 and Nasdaq indicate significant geopolitical tensions and corporate earnings challenges elsewhere, which can lead to a more cautious attitude among investors, even in emerging markets like Argentina. While local dynamics show promise, continuous global instability can pose risks to market performance and investment flows.
**Host:** Thank you for your insights, Dr. Ramírez. It appears that while there are positive developments in Argentina, challenges remain on the global front.
**Dr. Ramírez:** Absolutely, and it will be interesting to see how these factors evolve. Thanks again for having me!
**Host:** Thank you! That was Dr. Lucia Ramírez, sharing her expertise on the latest economic developments in Argentina as they strive for growth amidst global challenges. Stay tuned for more updates.