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Dollar, bonds and stocks: data you need to know to decide your investments

Dollar, bonds and stocks: data you need to know to decide your investments

The arrival of Luis Toto Caputo solves the problems of the Argentine financial system, with the departure of Emilio Ocampo as a candidate for president of the Central Bank, the fundamentalists of the dollarization and the elimination of the Central Bank are out of the race. The titles will remain as marketing pieces of a successful political campaign.

Financial problems will seek to be overcome with debt, this is not bad in itself, but it could be a mistake, if after taking on the debt we do not achieve a fiscal surplus, and the GDP begins to grow.

The financial economy is a mess, public securities and stocks are on the rise and do not seem to stop improving in the short term. It was bought with the rumor that it could win Javier Milei, The taking of profits will occur after he takes office and his true government plan is known, you have to sell with the news.

In the meantime, thousands of conjectures are being woven, which are taking the economy to a unexpected price adjustment. The careful prices were left behind, and many companies took the opportunity to adjust what could not be done under the government of Alberto Fernández, be careful with the November inflation index.

In summary, the economy linked to finance is going through its best moment, the international image of the president-elect is the best, what is coming to the market is unbeatable. If the bonds AL30 If they reach a price above US$ 40.0, we will be one step away from being able to put together a line of financing with a guarantee of public securities, that will give room for dollars to enter, that will be the fundamental stone to solve the problem of Leliq and the step prior to the uprising of the exchange stocks.

In order to close the circle of happiness, the government should achieve fiscal balance, to do so it would need to generate budgetary savings of approximately US$18 billion, which will have harmful consequences for the real economy. To compensate for this bad experience, generous money laundering would be necessary, so that the savings of Argentines emerge, and this is transformed into investment, trying to compensate for the drop in economic activity that the budgetary adjustment will generate.

The real economy does not have precise information about what is coming in the economy in the future, many economic agents have begun to imagine a very high exchange rate, and this has caused many prices in the economy to escape the rise, they grew so much so that they are not available to the consumer, which could precipitate an economic recession.

It is very important that the president-elect’s team communicates what it is going to do in economic matters, otherwise prices may take undesired directions and generate an inflationary rise that was not on paper.

Another no small issue is the economy of the provinces and municipalities, in December the half bonus must be paid and many subnational states do not have the liquidity to face these commitments. In the market, a drop in consumer income is observed, with a considerable increase in the prices of goods and services. It should not be ruled out that some provincial governments will resort to quasi-currencies if the tension with the national government is unblocked, which intends to reduce the transfer of funds to the provinces.

The dollar is always the dollar

In the market, the future November dollar is located at $789, the export dollar today is located at $650, the dollar that will govern in the new administration will surely not be above $789 and will not be below $650, the novelty is that there will surely be a dollar for exports and imports, something very healthy because it would revive the dollar futures market.

Alternative dollars will return to a 100% gap, therefore, we believe that the price would be around $1,300/$1,500 by the end of the year. We are inclined to think that it will be closer to $1,300.

Conclusions

. -The president-elect lied to us when he told us that he had a team studying economic problems a year ago, he chose the minister in the final 10 meters, and he gave those who accompanied him from the beginning a vacation. In Libertad Avanza Emilio Ocampo had been confirmed as the future president of the Central Bank to close it, and they took him down before he opened the door to enter.

. – Mauricio Macri’s team of ministers is becoming stronger in Javier Milei’s cabinet, it is good news for the markets that continue to grow in prices.

. – The arrival of Luis Toto Caputo pushes up the prices of banking shares on the stock market, the rest are taking profits. The bonds look exhausted, but we believe that before Javier Milei takes office as president they will have another bullish rally. Next week with American markets active, we could see renewed increases in bonds and stocks.

. – The wholesale dollar expects a strong rise from December 10 onwards, while alternative dollars will have a gap of 100%, at least until Argentina receives genuine dollars from the soybean and corn harvest starting in April 2024.

. – With the arrival of Javier Milei to the presidency, the way of doing business changes, an economy that will look more closely at export output, and will have the domestic economy more complicated. Financial assets will continue to rise. The real economy expects a harsh recession. These are the adjustment plans, we will have to study how to stand in the face of the new economic scenario.

Source: Ambito

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