This article was originally published on ETFTrends.com.
Saturday marks the inauguration for Mexico's newest president as Andrés Manuel López Obrador will take office and his policies, as he gets into the thick of his presidency, will weigh heavily on the Direxion Daily Latin America Bull 3X ETF (LBJ) .
LBJ seeks daily investment results equal to 300% of the daily performance of the S&P Latin America 40 Index. The index itself is a float-adjusted market capitalization weighted equity index of issuers drawn from five major Latin American markets: Brazil, Chile, Columbia, Mexico, and Perú.
Lopez Obrador will inherit a host of issues to fix in Mexico, but as the country faces an influx of migrants from Central America who have congregated near the U.S.-Mexico border in Tijuana, this latest development has come to the forefront of his expansive to-do list.
New Mexico President Will Face Baptism by Fire
U.S.-Mexico relations will be tested in the forthcoming weeks as the border situation has reached stratospheric levels in terms of media attention. With U.S. President Donald Trump coming under fire as images of U.S. border patrol agents teargassing migrant women and children flooded media outlets, the situation has become only more tense.
“They’re not coming into the United States. They will not be coming into our country," Trump said of the border situation, noting that such means weren't used on children, but his political opponents think otherwise.
In the meantime, the number of migrants heading into Mexico from Central American countries like Honduras continues to multiply exponentially as they attempt to seek asylum within the United States. In the meantime, the number of those applying for asylum legally outweighs the number of immigration officials that can process the requests, causing a situation in Mexico where the country could be overrun by overcrowded migrant camps and shelters.
“The Mexican government is in a dead-end alley,” said Raúl Benítez Manaut, a professor of international relations at the National Autonomous University of Mexico. “López Obrador is facing a baptism of fire, and a dilemma of whether he should maintain his promises of humanitarian policies, or stop the masses of migrants trying to reach the U.S.”
Prior to his election victory, Lopez Obrador was a proponent of protecting the poor and it will be interesting to see if his agenda that earned him the trust of Mexican voters will continue as he takes office on Saturday, and whether he carries this same agenda into tackling the migrant situation.
Mexico Economy Grew in Q3
The economy is always a topic of contention for any president, but Lopez Obrador will at least get a head start as Mexico's gross domestic product grew by 3.6% during the third quarter. The Federal Reserve Board of Dallas estimates that the country's economy will grow at an aggregate 2.1% for the year.
The growth comes as Obrador sparked controversy when his latest plans for his forthcoming presidency were deemed as damaging to Mexico’s economy. For example, his proposed moves included a push to limit the fees banks can charge customers as well as a decision to end a $13 billion airport project in Mexico City that already raised funds via overseas bonds.
However, his latest economic initiatives have been more openly received. This past weekend, Mexican voters decided on whether 10 policy initiatives by the incoming administration should move forward and all 10 were eventually approved.
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