S&P Merval Deepens Profit Taking and Falls Third Wheel; country risk stops bullish streak

The index S&P Merval falls 2.3% this Friday, September 1, due to renewed profit taking and falls for the third round, in line with the Argentine papers in Wall Street, Meanwhile he risk country stops a mini bullish streak.

All this, in the middle of a portfolio dollarization that continues to put pressure on the peso in the parallel dollar marketsin an uncertain political and economic panorama facing the general elections after knowing the result of the definitive scrutiny of the PASOwhich brought the three winning forces closer and made the scenario more complex for local investors.

Meanwhile, on the international scene, the US employment datawhich was better than expected, but increased the unemploymentand investors in Wall Street they see a new rate hike by the Federal Reserve (Fed) less likely.

How the S&P Merval reacts

In this context, the leading index of the local stock market, the S&P Merval, loses 2.3%, to 638,517.42 units, after a bullish opening. The Merval comes from gaining a strong 43% in August and marking an intraday all-time high in pesos of 690,781.66 points on Tuesday.

In the leading panel, bank papers lead the losses, with Macro Bank (-4.5%), BBVA (-3.2%) and Galician Financial Group (-3.2%). The only raises are for mirgor (+0.4%) and transener (+0.3%).

Due to the proximity of votes they obtained javier milei, Patricia Bullrich and Sergio Massa, the stage is little. “We do not see in any way that Milei can prevail in the first round. We do not believe that she will have a 10-point difference with the second,” he said. Marina Acosta, from the consulting company Analogías. And he explained that, in the PASSED, the voter appears to be much more playful than in the general elections where the most strategic or useful vote does appear. “The real vote now comes in the generals,” he said.

For his part, Lautaro Moschetteconomist of the Freedom and Progress Foundationindicates that, taking the data (inflationary) end to end of the month, prices increased 13.4%. For worse, expect the expectations of new devaluations will continue to put pressure on upwards to the inflation projections and by the end of the year we will be passing 150%.

It also indicates that “the devaluation gave a very important jump in the nominal value of the economy that will probably persist between now and the end of the year.” This creates a complicated environment.

However, Personal Portfolio Investments points out that ‘the word’crisis‘ in Japanese is composed of the characters ‘danger’ and ‘opportunity'”. Therefore, they consider that we should point out that, for aggressive investors, this scenario also provides a good opportunity to position themselves in the public services sector given the decline in their valuations.

“The next president will have to quickly make market-friendly reforms. Otherwise, it seems likely that the agreement (with the International Monetary Fund) falls apart,” said Capital Economics.

In Wall Streetthe Argentine papers operate with ups and downs and yield up to 3.4%, led by BBVAfollowed by Supervielle (-3.2%), Cresusd (-3%), Galician Financial Group (-2.6%) and black hill (2.4%). The earnings correspond to Take off (+3.4%), Free market (+3%), Gas Conveyor (+1%), Pampa Energy (+0.5%) and Telecom (+0.5%).

Bonds and country risk

In that context, the sovereign dollar bonds They start the month with the majority of falls. Those who lead the casualties are the AL41D (-3.6%), the GD29D (-2.7%) and the AL30D (-1.7%) while the only one that rises is the GD38D (+2.5%).

Given this, the Argentine country risk measured by the JP Morgan bank it gave up 0.4% to 2,089 units, after two firm rises in a row.

This Friday, the Ministry of Economy He called a debt tender off the agenda and went out to look for pesos on the market. “In a move that makes sense given the demand for coverage and the need for cash, it is putting out four bonds, all to 2024 and indexed,” recalled the StoneX brokerage.