Ups and downs and volatility They are the two words that could describe what happened during the first semester in the financial markets, both at the local level and in the offshore field.
With the full exercise of the second presidency at the head of the White House, Donald Trump introduced unique condiments to the geopolitical scenario.
First, the comings and turns in tariffs meant a roller coaster of emotions among investors, with an unexpected dynamic in the markets that generated challenges and opportunities. While that forehead seems more content, the negotiations are still in the middle of the course and nothing guarantees a peaceful ending to them.
Second, the initial efforts to mark a sustainable fiscal course for the American treasure have been truncated in just a few months. Investors distrust the current dynamics and punish the dollar. Hence, it is not surprising that the US currency has not acted as a real value refuge at times of greater global instability that caused the recent conflict in Israel with Iran.
Can the dollar lose your global reserve status? We do not know for sure, but to the extent that there are no signals to the compression of the fiscal deficit, the uncertainty about the bond market will persist.
Along these lines, the forced question from the investor’s optics is how to hit this to emerging markets in general and Argentina in particular. Contrary to the expected, It could be positive for several catalysts.
On the one hand, the weak dollar favors the prices of commodities, offering an income ceiling for net export countries of raw materials. In addition, war conflicts stimulate oil prices, offering an extra thrust to commercial scales.
On the other hand, the strong economic orthodoxy that predominates in these latitudes (except for Brazil), allows to reduce exchange volatilities. During the last weeks the local currencies have shown many strengths, favoring the exposure of domestic debt.
Likewise, the region is far from the main geopolitical risk foci, favoring the predictability of foreign capital that arrives in opportunities.
Finally, global growth remains resilient, opening an opportunity for Latin American countries in terms of intelligent commercial insertion in a context of climbing between the main international players.
The approach to an off -road portfolio
With the previous data, Diversification It must prevail in a portfolio for the second half of this 2025.
Today global rates have an adequate-Risgo return relationship. Short treasuries are offering rates above 4% per year, far exceeding the inflation rate of that country. There are also corporate bonds of investment grade with rate close to 5% per year.
The American Equity looks demanding, so we should be more selective than ever, with many of the MAG-7 still in areas of strong growth but with somewhat widened value.
Due to these latitudes, emerging actions look attractive, with prices/profits relationships at good entry points. Brazil stands out, with the possibility of making a Catch up against other markets in the region, although with the risk of “too soon” for the electoral trace.
In the case of Argentina, the successful macroeconomic system that contrasts with micro challenges favors greater exposure to sovereign bonds over the actions. At two -digit rates and with country risk compression possibilities, the sovereigns “Hard Dollar” still look attractive. For risk prone, the actions of the Oil & Gas sector look favorite in any portfolio.
Beyond these premises, the key will be to monitor the events to distinguish the short -term tanning factors. It is easy to say, but, without a doubt, difficult to implement it.
Head of Research & Strategy in Inviu
Source: Ambito
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