Elections, dollar and shares: Is a new Platita Plan coming?

Less than 100 days before the elections, the market will continue its dynamics of becoming dollarized. The challenge is to see if stocks and bonds copy the bullish run.

The economy entered into a dynamic inflationary which has a floor at 7% per month, this implies that devaluations will have at least a floor of 6.5% per month. This implies that we have an annual inflation floor of 125.2% and a floor devaluation rate of 112.9% per year. From there up everything is possible.

The acceleration in prices is given by a rise in business costs in companies, lower levels of profitability and a lengthening of collection periods. Everything is combined so that prices continue to climb upwards, the only limit is the market’s ability to validate these increases.

The meat reached a price ceiling, and it would seem that from there it does not scale anymore, the same happens with pork, and chicken is falling in price. Wages cannot validate more increases than those established, an increase in prices can only be observed if wages increase.

The arrival of a little money plan, the PASO elections will be in 90 days, and the government needs to be competitive. The financial strategy is very clear, interest rates at 91% per year, and future dollar rises in search of calming the present dollar.

Find out more – Dollar and inflation: businessmen predict how much it will close at in 2023

The dollar in the August position futures market is located at $354.50 when the dollar today is worth $225.09, in 120 days the difference is 57.5% and if we annualize the rate we go to 175.0% of annual increase. The Central Bank sells future dollars at very high prices so that speculators give up this operation, it wants to keep the exchange rate at bay and not fall into devaluation.

From our point of view, the government is preparing an economic scenario where it wants inflation not to run wild, the exchange rate rises a little less than inflation, and create a scenario of economic improvement in the next 90 days.

It is difficult to come up with an economic plan with such a shortage of dollars, a floor inflation of 7.0% per month, with closed imports and high distrust on the part of investors.

The world does not accompany, the price of oil at the international level does not stop falling, something that we do not observe in the local service stations, this means that the prices of soybeans and corn fail to thread price increases in the short term. The producers delay the liquidation of the few grains they harvested hoping for a better price, which has not yet appeared. The hope of a significant wheat planting is diluted, because it does not rain, and the soil does not have the expected moisture.

Conclusion

. – The government prepares a plan to reach the elections competitively, one more version of the little money plan. It is not helped by the external context, and it is probable that such actions become accelerators of the inflation rate.

. – The drop in oil at the international level keeps the local stock market ironed, dominated by companies linked to energy, and puts a temporary ceiling on the prices of soybeans and corn.

. – The United States Federal Reserve raised the rate again, now it stands at 5.25% annually, not good news. Perhaps the United States will take pity on us and push the IMF to make us the disbursements for the whole year, it would be about US$ 10.6 billion that would come to increase the reserves before the elections STEP.

. – Markets always dollarize before elections, from this starting point before the August elections the blue dollar could be above $600, looking for a new equilibrium level. Post elections, the result will determine a further escalation or stagnation until the October elections.

. – Another asset chosen before the elections could be bonds and stocks, for now they are in a profit-taking process, but we do not rule out an upward rally in these papers, from the second half of May onwards. The stock market is always ahead, for now he has no opinion.