The illusion lasted one day. Stock markets in the United States collapsed and investors sought refuge in gold, which rose 0.88%, and in US Treasury bonds, which lowered their yield to 2.76% as their price rose.
It is no accident that stocks are crashing and investors are running after safer assets. There is fear of what is to come because a new rate hike is coming in the United States and consumption threatens to fall further. The market, with yesterday’s behavior, anticipates that fear.
In Argentina and emerging countries that aversion to risk was felt. The EEM index of emerging countries fell 1.7% because all country risks in the region rose. In other words, the prices of debt bonds fell. In Brazil increased 5 units (+1.54%) to 330 basis points; in Ecuador12 units (+1.47%) to 827 points and in Mexico 3 units (+1.23%) at 246 points.
In Argentina, the declines in public securities with foreign law were up to 1.8% and the country risk increased 24 units (+1.3%) to 1,936 basis points.
Investors decided to cover themselves with the bonds that adjust for the CER, which is why they rose in almost all their versions. The 2023, the most sought after, grew 0.30% and the price is showing that they are ahead of inflation.
That is why the auction of Treasury Bonds is awaited, which does not have a menu as attractive as last week’s. It is that they need to raise less than $100 billion to settle the maturities of the month. For this reason, the most sought-after letter that adjusts for CER (LECER) and expires in 2023, is within the Market Makers program in which only stockbrokers and other institutional investors who have signed up for the program can participate.
In the broader tender, there are two LECERs, but they are less attractive because they expire in April 2024 and November 2025, that is, with another government administration. But there are so few investments that give income, that they can attract some interested parties. In fact, Boncers maturing in 2024 and onwards rose more than 0.40% yesterday and narrowed the gap with those maturing next year.
The drop in the AL30 and GD30 bonds, which are used to trade financial dollars, caused the price of the MEP to rise $1.14 (+0.5%) to $211.75 and that of the cash with settlement, $1.22 ( +0.6%) to $212.54.
In the wholesale square, the dollar increased 19 cents to $119.12 and the Central Bank was able to buy just USD 2 million which raised reserves by 6 million to USD 41,652 million. The rise in gold and the fall of the dollar against the 6 main world currencies helped to improve the level of reserves.
The stock market, contrary to what happened in the United States, had a good performance. With little business for $849 million, the S&P Merval, the leading stock index, advanced 1.02% in pesos and 0.4% in dollars.
The most outstanding roles were those of Macro desk (+4.96%) for its decision to pay dividends in cash and those of Pampa Energy (+3.95%) for the official resolution that favors them in the settlement of dollars.
The ADR’s -certificates of holdings of shares listed on the New York Stock Exchange- had a bad wheel. The worst happened with the collapse of Free market (-9.6%) dragged down by technology stocks in the United States.
Today’s holiday will be a relief, but the market will closely follow what is happening in the United States, which is acting on account of a strong recession caused by rate hikes to contain inflation. With China and the United States weakened, there is no room for risky investments.
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