Attention investors: blue dollar guru gave key advice

Attention investors: blue dollar guru gave key advice

In an opinion column, the economist and financial analyst Salvador Di Stéfano recommended calm when investing in the coming weeks, since the scenario is not clear regarding what is appropriate.

“World markets remain very complicated,” says Di Stéfano, who focuses on the United States and Brazil.

Regarding Argentina, he maintains: “We are entering phase 3 of the monetary plan, this implies currency competition and exit from the stocks. Although the stocks will be exited gradually, an agreement with the IMF and the arrival of fresh funds can accelerate the process, but we could not project any of this before April 2025”.

Below is Di Stéfano’s column:

The international context is challenging, unsaddle until it clears. World markets remain very complicatedBrazil does not stop selling dollars, and the real stands at 6.20 reais per dollar. The price of the real does not seem to have a certain destiny, in a context where the rate in Brazil is 12.25% annually, and inflation for the last 12 months is 4.87% annually. By 2025, a drop in economic activity in Brazil is not expected, but exchange rate instability will cause noise in the entire region.

The United States does not show a clear trend in stock indices. The rise in the rate of return on 10-year Treasury bonds, which is above 4.5% annually, is of little help. Without a clear path of economic measures from the new government, with geopolitical noises such as the Trump government’s claims on the Panama Canal, tariffs on partner countries and an eventual trade war with China, there is no clarity in which American actions have an upward path, at least until the economic definitions are present.

China is showing the yuan trading at a ceiling at 7.30 yuan per dollar. Everything suggests that this ceiling could be exceeded and, if this happens, raw materials for the Chinese market would become more expensive, which would generate lower demand and this would arbitrarily lower prices. Carefully monitor energy and agricultural raw materials.

In Argentina, we enter phase 3 of the monetary plan, this implies currency competition and exit from the stocks. Although the stocks will be gradually exited, an agreement with the IMF and the arrival of fresh funds can accelerate the process, but we could not project any of this before April 2025.

Currency competition will be very healthy for Argentina. However, it must be understood that the starting point is a mass of pesos that the government inherited from the previous administration, that the broad monetary base is located at $47 billion and that the monetary base today is located at $28 billion. There is a large mass of pesos that the market will have to absorb until it is reassured that we will not have any shocks in the money market.

The best recipe for currency competition is a fiscal surplus on the stick, zero monetary issuance and capitalization of the Central Bank. None of this can be done immediately. The year 2025 will be challenging, and we will have to work with a chainsaw to meet tax reduction objectives and free the productive forces from State oppression.

Conclusions

. – The international market requires unsaddling until it clears up. During 2024, a lot of money was made in the market, in the last part of the year, before the money laundering, Argentine bonds were worth around 40% parity, while, currently, they are worth close to 70% parity . In the market, no one went bankrupt to take profits.

. – With regard to Argentine companies listed on the stock market, banks have a price-to-earnings ratio similar to international banks, while this ratio doubles compared to Brazilian banks. We are not saying that you have to buy banks from Brazil, we are saying be careful because we are at a good price.

. – In the energy world, there are many business possibilities, but the increases were extraordinary. YPF, in August, was worth US$18.00, it reached a maximum of US$45 and today it is worth US$42. Its market capitalization is US$16.7 billion and its projected price-earnings ratio is 8. .7 years. Petrobras Brazil is worth US$47.3 billion, its projected price-earnings ratio is 4.3 years. In May 2024 it was worth US$16.50 and today it is worth US$12.50. They are not comparable due to their future growth expectations, but today it seems to me that they are unarbitrated. Maybe Brazil scares me a little.

. – We continue to recommend taking a standstill in the market. It is time to reflect on how to invest in a context that does not define a clear course abroad, and in Argentina we have ahead of us an end of the year with a rise in rates in pesos. The government will honor the debt of sovereign bonds, we will have a low stock of reserves, and a path of budget cuts to continue sustaining the fiscal surplus. There is no need to rush, being liquid will be the key, since the market will give us many opportunities in 2025.

Source: Ambito

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