Yellen, El-Erian and the words (today) of Jerome Powell: notes to know what will happen to the dollar, Argentine stocks and bonds

Yellen, El-Erian and the words (today) of Jerome Powell: notes to know what will happen to the dollar, Argentine stocks and bonds

“I frankly hope that the Fed has not, for the 3rd time in this escalation cycle, missed the opportunity to implement policy actions on time,” the former PIMCO bombarded. Strictly speaking, it had previously warned during the month of January about the risks of recession when attempting a “soft-landing”, as well as warned that future timing errors could be “damaging not only for the credibility of the central bank and the effectiveness for future policies, but also, importantly, for the well-being of the nation and global economies.

Like them, a part of investors mistrust the diagnosis of the FED. As said, the Federal Reserve raised its reference rate by 25 basis points last week, while unemployment data reached 3.4%, the lowest level in 53 years, illustrating the strengthening of the labor market, against all odds. .

Until Goldman Sachs seems to want to ride the wave of skepticism. As reported in various reports, the economic analysts of that investment bank forecast an increase of 25 basis points for the next two meetings, and expect it to remain at a maximum rate of 5.35% for the remainder of the year.

All this was seen yesterday in the markets. The bulk of the shares of the Dow Jones, the S&P500 and even the Nasdaq lost ground and in Argentina, except for some stocks, there were strong declines, led by dollar bonds that fell by as much as 4.5%.

In any case, the one who “commands” is Jerome Powell, the head of the FED, who today will be interviewed by the director of “The Economic Club” at 2:00 p.m. (Argentine time). This meeting can be viewed live through the webinar published on the FED website. We will have to be vigilant.

the local village

Apart from the situation described above, for the analysts consulted by Ambit, It is relevant to carry out an exercise and make a distinction between the different economic sectors and the actions of the companies that are part of the local market.

Consulted, Diego Martínez Burzaco, Head of Research at Inviu, highlighted the energy sector as one of the “most attractive for medium-term portfolios”. He maintains that this sector can continue experiencing a strong recovery, while taking into account the domestic electoral scenario. The stocks he recommends paying attention to are: Vista, YPF, Transportadora de Gas del Sur (TGS), and Transportadora de Gas del Norte (TGN). While it chooses Pampa Energía (PAMP) and Central Puerto (CEPU) as alternative options to oil. For analysts, the energy sector seems to have found a suitable environment to support the increases, where crude oil production reached a maximum of 11 years thanks to the advances in the exploitation of Vaca Muerta.

On the other hand, the “immense potential” that exists in the banking sector is also highlighted, recalling the performance of Grupo Financiero Galicia (46%) and Banco Macro (42%) in the month of January. The investment advisory firm pointed out that “the upside of Argentine equity is enormous, and for those long-term investors (at least after the change of government) each adjustment can present a good opportunity to strengthen their position in companies that we consider attractive.”

Gustavo Neffa, partner and director of Research for Traders, highlighted the companies Ternium Argentina (TXAR) and Aluar (ALUA) within the industrial sector, which he considers “relatively low volatility and with good cash flow in the US.” These shares of Argentine companies have had good returns, positioning themselves 21% higher during the month of January in the case of TXAR, and 16% for ALUA.

what’s coming

After the increase in the United States interest rate by the Fed, and the publication of the unemployment data, all eyes are on the officials of the entity and the new indices that will be announced throughout of the week.

As was said, in the preview, the publication of the job creation data for the month of January exceeded what was expected by analysts, which “suggests greater wage pressure going forward, would imply a risk for the current disinflation in the United States,” according to analysts at Personal Investment Portfolio (PPI).

Therefore, possible signs of a slowdown that will be announced this Wednesday and Thursday will be of great importance: mortgage and unemployment applications, respectively, as well as the publication of the trade balance. Finally, on Friday the expectations survey for February from the University of Michigan will be released.

On the other hand, the eye will be on the inflation indices for January published by the Chinese government, which will be released on Thursday. Expectations are that there will be no price variations against December values, positioning annual inflation at 6.5%.

Source: Ambito

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