The current panorama shows a change in the tendency of the markets of Variable income, where international actions – particularly those of Latin America– They already exceed Americans. This turn is due to a combination of factors: The reversal to the average after the previous extraordinary performance of Wall Streetadjustments in global monetary policy and perspectives of robust growth for emerging economies. Thus, “American exceptionality“It seems to run out, which opens the door to new investment opportunities.
The Bank of America (Bofa) He predicted a change of trend in markets in one of his latest reports. According to the bank, the actions outside the US will lead the yields, what he considers is “The beginning of the end of US exceptionality” This projection was evident at the end of last week, when several Latin American bags They far exceeded the performance of New York Stock Exchange (NYSE). All this, contrary to projected forecasts for the region under the new Trump era.
In 2025 and to date The S&P 500 paid 3.6%. The Nasdaq 100 4.7% and the Dow Jones Industrial 4.4%. In contrast, The Colcap (Colombia) scored a 13% earnings in dollarsthe S&P IPSA (Chile) 9%and Brazil’s Bovespa cut up to 7.2%, but exceeded 10%. He S&P Merval from Argentina is outside the regional tendency, with a negative performance that exceeds the -11%.
The trend is clearer when the Quoted or Exchange-Traced Funds (ETFS) of these countries. Colombia (GXG) climbed until last week 14.5%, Chile (ECH) 14% and Brazil (EWZ) 13%. Then comes Mexico (EWW) that scale almost 11%. Argentina’s, which in 2024 was the emerging star, As soon as it rose 1.3%.
The reason behind Latin American solidity
In this regard, Luis de DominicisMaster in Finance, he says in statements to Scope That, for now, the average global growth of returns, by excluding the US, is from 5.8%while the US market records a 2.9%. This is due, as explained, in part to a process of average reversion: “Last year, the US market had a much higher performance than the rest of the world, so it is natural that an adjustment now experiences,”
And as the strategist remembers, in Latin America, the two main economies, Brazil and Mexicothey fell throughout 2024, and Chili He also closed the year in red.
The financial advisor Pablo Das Neves He adds that in the first days of 2025 global markets conform to Trump’s strategy: “Hit first and negotiate later “. This added volatility to a scenario already marked by modest projections for the US economy, he says.
“In contrast, Latin America It is recommended by investment banks due to their perspectives of robust and stable growthdriven by structural reforms and strategic sectors such as energy and mining ”, Analyze Neves. This combination of factors helps strengthen the region’s bags and further feeds positive expectations for 2025.
The end of US exceptionality
Under the title “The Price Is Right” the Bofa highlights the accumulated yields of the year to date (YTD) in US dollars of several international markets: Brazil (+12%); Germany (+10%); China, United Kingdom, Australia (+6%); Canada: +4%; USA (+3%) and Japan: (+1%).
The document argues that this higher performance of international markets is driven by a key factor: “The end of the US exceptionality. ” The Wall Street giant concludes that the markets outside the US regain land against US variable income, which led market performance in recent years.
In that same line is expressed Gustavo Neffapartner of Research For Traderswho explains in statements to this media that, last year, Latin American markets faced a significant setback, largely due to a “Fly to Quality” driven by the rebound of interest rates in the main places during the second semester.
“To this were added specific factors, such as negative signals towards markets by Lula in Brazil and the solid performance of the technological sector in the US ”. It should be remembered that this item was the one that attracted most of the “Equity” funds to that country.
To this is also added the most aggressive position of the Federal Reserve (Fed) in terms of rates. “This strengthened the dollar, and consequently the hard currency yields of the bags globally suffered, ”he says.
To the beat of LATAM bags appears China on the radar
And as Neffa explains, Investment flows of American mutual fundswhich are a key indicator, greatly avoided emerging markets for a while. “Chinathat he had had a weak performance, he began to recover only in the last quarter thanks to Two stimulus plans and a forced reduction of rates, ”says Neffawhich prevented his market from having an even more negative year.
Global Equity Returns.jpeg
And now, after a long time, China has a certain attraction again in investor races, for the enormous competition of electric cars and especially for technological ones with the impact of cheaper and more powerful artificial intelligence. “But it only has attractiveness in some sectors,” says Neffa.
Meanwhile, a Of Dominicis He likes China’s technological actions. “PDD holdings (PDDformerly known as Pinduoduo) is one of the main electronic commerce companies and owner of Temu” This paper is attractive to the strategist Your growth level of income
Another interesting action to continue in this segment is Alibaba (Baba) that presents results this Wednesday. A balance that the market looks forward, because in the last month, the role of E-commerce giant Chino climbed an impressive 52.7% and the projections are optimistic. Undoubtedly, an opportunity to add to portfolio.
Source: Ambito
