Argentine stocks on Wall Street soared; S&P Merval in dollars touched another record since 2019

Indeed, the index S&P Merval BYMA advanced 4.3% to 209,646.02 points, hand in hand with energy and financial actions. During one day it renewed the intraday record at 210,051.9 units. Besides, the leading panel climbed 3.4% in CCL dollars, and exceeded 610 points: it closed at 612.6 units, the highest level since August 2019.

The rises of Grupo Supervielle (+7.7%) stood out on the local stock market; Banco Macro (+7.4%); Galicia Financial Group (+7.3%); YPF (+7.1%); and Transportadora Gas del Sur (+7%).

“Beyond the momentum of the local stock market, which is very prominent and foreign queries are gradually being added in this regard, the recovery of the Asian stock markets, and especially the Brazilian one, helped this push. It is remarkable how little by little The volume of business is increasing and therefore, profit taking occurs on the same wheel. The privileged sector today were the banks, the most beaten last year”commented to AmbitAugusto Darget, President of Silver Cloud Advisors.

The main stock markets of the Asia-Pacific region registered positive results this Thursday: the Japanese Nikkei index rose 0.4%; Hong Kong 1.3%; South Korea 0.4% and Taiwan 0.7%; while China gained 1% in its Shanghai index and 2.1% in the Shenzhen. At the same time, the Bovespa index of the Sao Paulo stock exchange gained 2.2%, to 107,641 points, while the Brazilian real appreciated 1.5%, to 5.3515 units per dollar.

Very different was the panorama in the US where, pending the key employment data that will be released this Friday, Wall Street’s main indices closed sharply lower, more than 1%, as new evidence of labor market tightness dashed investors’ hopes that the Federal Reserve could soon pause its rate-raising cycle.

The Nasdaq was the one that showed the biggest loss (-1.5%), followed by the S&P500, with a contraction of 1.2%, and the Dow Jones, which lost 1%. The real estate sector was the hardest hit (-2.9%), while the energy segment was the most defensive and appreciated almost 2%, since WTI oil halted the week’s falls and rebounded 1.2% to $73.75, while Brent gained 1.1% to $78.7.

The ADP national employment report on Thursday showed an increase in private employment higher than expected in December. Another report showed that weekly jobless claims fell last week. On Wednesday, another set of data had shown a moderate drop in job offers in the United States.

While a strong labor market would normally be a welcome sign of economic strength, investors currently see it as a reason for the Federal Reserve to keep interest rates high. “It is very clear that good news for the labor market means bad news for the stock market. The data is showing that the labor market is very resilient.” said Anthony Saglimbene, chief market strategist at Ameriprise.

“As long as the job market is resilient, the Federal Reserve has to keep tightening financial conditions to bring inflation down,” added Saglimbene, who expects investors to keep an eye on wage inflation in Friday’s jobs report.

For its part, the dollar regained strength in the world against other currencies and pushed the DXY 0.86% to 105.1 points. Thus, US Treasury bonds increased their yield: the The ten-year reference rate rose 2 basis points and reached 3.70%. In addition, in the short term, 2-year interest was at 4.44% after having risen a little more than 9 points, indicated from PPI.

Bonds and country risk

In the fixed income segment, on the other hand, bonds in dollars closed mixed after two days with strong ascents. The outstanding increases of the day were for the Global 2029 (+3.8%) and the Global 2038 (+2.5%). While, decreases of up to 2.3% were marked by Bonar 2038 and Bonar 2041 (-1.4%). Thus, the Argentine country risk it rebounded 1.6% to 2,120 basis points.

For his part, dollar-linked sovereign bonds fell again, this time an average of 0.4%, with the volume spread out along the curve. Meanwhile, dual bonds showed very little activity and closed mixed, with TDF24 concentrating volume.

Regarding the segment CER, both the Leceres and the Bonceres showed good demand and rose 0.5% on average along the curve, reported from SBS.

Let’s remember that on Tuesday, the Ministry of Economy managed to reschedule payments this week for about 3 trillion pesos (about 16,820 million dollars) during the first quarter of the year, after an operation with high bank participation, where it extended payment terms between April 2024 and February 2024.