The main Wall Street indices are trading positive this Monday. Shares in Tesla soared more than 10%, providing the biggest boost to the S & P500 and the Nasdaq, after the company’s quarterly deliveries exceeded estimates, outpacing a global shortage of chips as production in China increased.
The bank index was up 2.7%, with Goldman Sachs, JPMorgan, Morgan Stanley and Wells Fargo gaining from 1.8% to 4.6%, following a jump in Treasury yields as the Investors expected a series of interest rate hikes from the Federal Reserve. Meanwhile, the shares of the oil majors Chevron Corp and Exxon Mobil Corp were up more than 1%.
At the domestic level, S&P Merval de Bolsas y Mercados Argentinos (BYMA) gained 2.5% in pesos up to 85,579 units, driven by YPF shares (6.7%).
It should be remembered that in 2021 the Buenos Aires stock market registered an increase of 66% measured in pesos, higher than the accumulated inflation in the year (around 50%), and the advance of the different dollars that operate in the local market, thus transforming in one of the best domestic investments, along with CER bonds (adjusted by IPC), and fixed rate securities.
“The shares recovered positions. The S&P Merval improved from US $ 361 to US $ 423 in the year, although it is still far from its historical average (US $ 600 at current prices and US $ 800 at constant prices)”, remarked a GMA report Capital.
Beyond this, 2021 will be remembered as the elusive year for emerging markets, where capital flows were not tempted by asset valuations. “Argentina could not stand out to this insignificance and investors exposed their disinterest regarding local assets, something that was reflected in the volume traded. Still, some selective stocks had good returns, while fixed income clearly had a deficit year “highlighted a report by Inviu.
In the fixed income segment, sovereign dollar bonds operate unevenly on this first day of the year. The most traded security, the AL30 bonar, registered improvements in its prices, but in the rest of the assets there were falls of up to 4%.
Last year, securities restructured in 2020 suffered drops of up to 20% (AL30D) in hard currency, and 10% on average.
In this framework, the Risk country climbed in the year 28%. In this wheel, the benchmark measured by the bank JP Morgan stood at 1,709 basis points, 21 units above last Friday’s close.
Investors await progress in the Government’s negotiations with the IMF to solve a debt impossible to face in the short term. It is worth noting that throughout this year the liability with the organization amounts to almost US $ 20,000 million, in a context in which net reserves barely exceed US $ 2,000 million.
“Within the framework of an agreement with the IMF, economic policy should implement certain turns, such as tracing a path of fiscal consolidation or avoiding deepening the exchange rate delay to protect the reserves” of the central bank (BCRA), estimated the consulting firm Ecolatina.
The market is also waiting for signs of a delayed “multi-year” economic plan in the face of exchange pressure, lack of reserves in the BCRA, annualized inflation above 50% and a complex fiscal deficit.
On New Year’s Eve the monetary authority published its “2022 Objectives and Plans”, among which the acceleration of the rate of adjustment of the official dollar to the rate of inflation and setting the path of the interest rate in a way that stands out towards positive real returns on investments in local currency.
“It remains to be seen the ‘timing’ and magnitude of this, where an expected inflation of more than 50% per year (by 2022) versus the ‘Leliqs’ (rates) at 68% per year (46% effective monthly considering a compounding every seven days ) makes it necessary to adjust upwards if the proposed objective is to be achieved, “said Roberto Geretto, an economist at the Fundcorp fund.
“Thus, either as its own objective or as part of an agreement with the IMF, it is likely that 2022 will see a rise in rates,” he added.
Source From: Ambito
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