|Day's Range||45,256.31 - 45,885.44|
|52 Week Range||38,265.51 - 45,885.44|
(Bloomberg) -- Mexican stocks are set to underperform emerging market stars next year amid worries about domestic economic policy, sluggish growth and U.S. trade ties. Mexico’s benchmark IPC index is projected to rise 7% next year to 47,800, according to the median of seven analysts surveyed by Bloomberg. That growth would be in line with the gauge’s performance so far in 2019 after a deal on Mexico’s trade pact with the U.S. and Canada fueled a December rally.Morgan Stanley and JPMorgan Chase & Co. are among banks that expect Latin America’s second-largest economy will continue to lag growth in Brazil and Colombia, where the main indexes are seen posting double-digit gains in 2020. Mexican stocks ranked eighth in a Bloomberg survey of 57 global investors, strategists and traders on their outlook for next year, behind China, India and Russia.Investors remain wary of a slump in capital investment under President Andres Manuel Lopez Obrador, who halted auctions of oil drilling blocks to private companies and has focused government resources on reviving state-owned oil company Pemex. Unless he reverses his stance to allow more private investment in energy, analysts think Mexican stocks and the overall economy will remain in the doldrums.“Energy remains the inflection point to decide on a true sentiment shift,” JPMorgan analyst Nur Cristiani said in a research note this week. “The key to truly unlocking investor confidence? Reopening the oil rounds.”Mexico’s economy is expected to mount an anemic rebound with growth around 1.1% next year after teetering on the brink of recession in 2019, according to a Citibanamex poll this week. Citibanamex analysts led by Williams Gonzalez said last week that estimates show company revenue will rise an average 6.1% and profits will grow 14% in 2020, with communications, industrial and discretionary sectors showing the best outlooks. Potential gains in the index were not attractive given the risks, the bank said.Among bright spots, a 20% minimum wage hike next year will make consumer stocks like Wal-Mart de Mexico a good bet, said Rodolfo Navarrete, head of analysis at Mexican brokerage Vector.But even with a free trade deal in place, Mexico could become a political punching bag for U.S President Donald Trump during next year’s election cycle, Navarrete said. He warned that Trump could revive threats to slap tariffs on Mexican goods. “Trump is unpredictable, and you have to take that into account,” he said in a telephone interview.Analysts at Santander led by Daniel Gewehr said in a note on Thursday that Mexican stocks are trading at around 13.8 times 2020 estimated earnings, which is about a 16% discount to their seven-year average. But Gewehr said that was not attractive enough to offset the risks from “uninspiring growth” and the “lack of visibility regarding the new administration’s policies.”While analysts are not recommending broad bets on Mexican stocks, they see opportunity for certain stocks. Both Santander and Itau BBA said energy infrastructure company IEnova was a top pick, with Itau seeing potential for a 30% gain in the stock next year.JPMorgan favors Mexican stocks that are insulated from the local economy, like industrial real estate developer Vesta, which records revenue in dollars, and Grupo Cementos de Chihuahua, whose U.S. business could benefit from stronger construction growth.Historically low valuations on Mexican stocks should limit downside, according to Morgan Stanley analyst Nikolaj Lippmann. In his 2020 outlook, he preferred dividend plays like real estate investment trust Fibra Macquarie.According to Lippmann, even a reopening of the energy sector would have only a modest positive impact. His base case projects the S&P/BMV IPC index will rise to 46,000 points next year while a reopening of the energy sector could help extend gains to 48,000.See alsoBank Analysts Step to Sunnier Side as 2020 May Not Be So BadAnalyst Who Called WeWork Debacle Sees Risks in Direct ListingsBiotech Analysts See Deals, Drug Data Carrying 2020 PerformanceElection Year Once Again Rekindles Hope for Infrastructure PushChip Analysts Struggle to Get Excited About 2020 After RallySoftware Analysts See More Volatility in an Uncertain 2020Facebook and Google Face ‘Supercharged’ Regulatory Risk in 2020Airbus Secures Lead Over Boeing as 737 Max Weighs Into 2020Strategists Butt Heads on Materials Stocks as Trade War Drags OnAfter ‘Blood-Spilled’ Year, Pot Firms Brace for Repeat in 2020Small-Caps Set to Retake 2020 Market Lead After Three-Year LagS&P 500 Melt-Up Is So Hot It’s Making Cheerleaders Into SkepticsConvertibles to Ride Market Highs With Half an Eye on PoliticsTo contact the reporter on this story: Michael O'Boyle in Mexico City at email@example.comTo contact the editors responsible for this story: Brad Olesen at firstname.lastname@example.org, Catherine Larkin, Jennifer Bissell-LinskFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The U.S. Federal Reserve and the European Central Bank both held on rates and said they were likely to do so in the near term. Emerging markets, which have largely mimicked the Fed's easing cycle this year, have found support from major central banks adopting an accommodative stance in the face of an economically damaging trade war between the United States and China.
Analysts say markets have priced in what is expected to be the final rate cut in Brazil interest rates, to a record low 4.5%, as economic indicators show improvement. "We expect unchanged interest rates next year," said You-Na Park-Heger, an analyst with Commerzbank. "Should the central bank leave the door open for interest rate cuts, this should weigh on the BRL." Wednesday's cut would be the bank's fourth this year.
* MSCI Latam stocks, currency indexes at over 1-mth highs * Brazil cut priced in, tightening cycle seen in 2020- Analyst * Higher metal prices support Chilean assets By Ambar Warrick Dec 11 (Reuters) - Brazilian assets firmed on Wednesday on expectations the country's central bank will cut the benchmark Selic interest rate to a record low 4.5%, while Latin American stocks hit the highest in more than a month on hopes for U.S.-China trade talks. "Until we see some confirmation, I think we'll see people getting a bit more nervous as that deadline nears," said William Jackson, chief emerging markets economist at Capital Economics in London. Brazil stocks rose while the real rose against the dollar to its strongest level in more than a month.
A revision of new North American Free Trade Agreement, called USMCA which was initially struck last year, adds more stringent oversight of the pact's labor provisions. Mexico's IPC index rose 1.4%, while the peso traded flat against a weaker dollar, after five straight sessions of gains.
* Brazil stocks down after four sessions of record highs * Brazil central bank cut largely expected on Wednesday * Chilean peso down as poll sees Q4 GDP contraction By Ambar Warrick Dec 10 (Reuters) - Brazilian stocks dipped on Tuesday while broader Latin American assets were subdued following a report of a possible delay to further U.S. tariff action on China. A Wall Street Journal report said that U.S. and Chinese trade negotiators were discussing a delay on a round of tariffs set to kick in on Dec. 15. Brazilian stocks ticked lower after marking a new record high over the past four sessions, while the MSCI's indexes of Latin American stocks and currencies were largely flat.
In Argentina, the battered peso was stable, while bond prices rose and country risk spreads tightened, showing the market took President-elect Alberto Fernandez's cabinet picks - featuring debt restructuring expert Martin Guzman as economy minister - in stride. Argentine markets had been on edge since Fernandez thumped President Mauricio Macri in the August primary election as it signaled a shift away from Macri's pro-business policy stance.
* MSCI Latam stocks, currency indexes retain last-week's gains * Dec. 15 U.S.-China tariffs to delay likely EM recovery -analysts * Metal prices rise as strength in Chinese imports implies demand * Chilean peso up for fifth straight day after C.bank stimulus By Ambar Warrick Dec 9 (Reuters) - Latin American markets held around a month's high on Monday, building slightly on gains made last week as the focus turned to the upcoming deadline on further U.S. tariff action against China. Lower-than-expected export data from China served to remind investors of the economic slowdown bought about by the Sino-U.S. trade war, although markets have so far held out hope for an interim deal before the Dec. 15 deadline. "If the December 15 tariffs on China go ahead, then our view is going to come under more significant pressure, with the anticipated EM growth recovery pushed from Q1 2020 to Q3 2020," Morgan Stanley analysts wrote in a note.
Cuts to the U.S. benchmark borrowing rate have lent support to emerging market currencies this year. Against a strong dollar, Chile's peso rallied 0.7% and logged its best week in more than eight years as the country's central bank tried to prop up the currency which fell to a record low last week after anti-government riots. Brazil's real firmed 1% to its highest level in almost one month, as consumer price inflation bounced back to seven-month highs in November.
* Latam stocks, currencies set for best week since late-Oct * Brazil stocks propped up by resources play * Chilean peso eyes best week since Sept-2018 By Ambar Warrick Dec 6 (Reuters) - Latin American stocks rose on Friday amid continued optimism over Sino-U.S. trade talks, while regional currencies continued to benefit from sustained weakness in the dollar. U.S. President Donald Trump on Thursday said trade talks are "moving right along," even as Beijing maintained its stance that some existing tariffs must come off as part of an interim agreement. The MSCI's index of Latin American stocks was set for an eighth straight day of gains, pushed up by heavyweight Brazilian stocks.
* Petrobras rises 2%, says may divest billions more than forecast * Chile stocks, peso rise; central bank holds benchmark rate * Argentine c. Stocks took support from lingering optimism over the Sino-U.S. trade war, after a Bloomberg report as well as positive comments from U.S. President Donald Trump brewed some hope over a "phase-one" trade deal. Regional markets have also been propped up by some positive economic readings this week, with better-than-expected GDP data from Brazil, Latin America's largest economy, being the most notable.
* MSCI's Latam stock index at highest since Nov 12 * Chile stocks, peso surge as C.bank holds benchmark rate * Argentine stocks down as C.bank chief resigns By Ambar Warrick Dec 5 (Reuters) - Latin American stocks touched a more than three-week high on Thursday, with Brazilian stocks at a record peak as the country's senate approved a military pension reform bill. Stocks took support from lingering optimism over the Sino-U.S. trade war, after a Bloomberg report as well as positive comments from U.S. President Donald Trump brewed some hope over a "phase-one" trade deal. Regional markets have also been propped up by some positive economic readings this week, with better-than-expected GDP data from Brazil, Latin America's largest economy, being the most notable.
* Brazil stocks up as much as 0.8% * Chilean assets rise ahead of C.bank decision, rate cut likely * Chile rate cut to be close call- Analyst * Mexican, Colombian pesos up on strong oil prices By Ambar Warrick Dec 4 (Reuters) - Latin American stock markets rose on Wednesday as U.S. President Donald Trump voiced more optimism than he did a day earlier about trade talks with China, and Brazilian equities mounted a record high, with an investment manager telling a Reuters forum the country was his top regional investment pick. Trump said that trade talks with China were going "very well." On Tuesday, he had flagged a possible delay in reaching a deal. A basket of Latin American stocks rose to a more than one-week high, pushed up mainly by a jump in Brazilian equities.
* Brazil real surges after better-than-expected GDP * Traders cautious after Trump says no trade deal deadline * EM currencies due for recovery - analyst By Ambar Warrick Dec 3 (Reuters) - Most Latin American stock markets traded in a tight range on Tuesday, while currencies strengthened against a weak dollar, as comments by U.S. President Donald Trump sparked fears of a delay in the resolution to the Sino-U.S. trade war. Global equities dropped after Trump said a trade deal with China might be delayed until after the November 2020 U.S. presidential election. Investors had earlier expected an interim trade deal between Washington and Beijing by mid-November, but the prospect of a delayed conclusion now opens the door for further escalation in tensions that have dogged risk assets for more than a year.
* Trump to restore tariffs on metal imports from Brazil, Argentina * Latam FX gain as dollar drops after weak U.S. manufacturing data * Brazil stocks rise after strong manufacturing data * Chilean peso firms as central bank intervention kicks in By Susan Mathew Dec 2 (Reuters) - A dollar weakened by poor U.S. economic data helped Latin American currencies brush off the re-imposition of U.S. tariffs on steel and aluminum imports from Brazil and Argentina on Monday. Brazil's real firmed 0.4% with a spot auction by the central bank supporting the currency, while the Argentine and Mexican pesos were flat against a dollar that slid on weak U.S. manufacturing data. Surprising officials in the two South American countries, U.S. President Donald Trump said on Monday he would restore tariffs on U.S. steel and aluminum imports, accusing them of devaluing their currencies to the detriment of U.S. farmers.
* Trump to restore tariffs on imports from Brazil, Argentina * Brazil stocks rise 1% after strong manufacturing data * Chilean peso firms as central bank intervention kicks in By Ambar Warrick Dec 2 (Reuters) - Brazil's real firmed on Monday as a spot auction by the central bank supported the currency following a tweet by U.S. President Donald Trump that said he was restoring tariffs on metal imports from Brazil and Argentina. Without going into details, Trump said he would restore tariffs on U.S. steel and aluminum imports, surprising officials in the two South American countries and prompting them to seek explanations.
* Chile's peso sees second best day in 10 years on intervention * Brazil's real slides 1%, intervention's effect wanes By Aaron Saldanha Nov 29 (Reuters) - Chile's peso starred among Latin American currencies on Friday, bouncing off an all-time closing low on news of a chunky central bank intervention program, which set it on course for its second best day in more than a decade. The country's central bank late on Thursday said it would sell up to $20 billion in foreign currency interventions starting on Monday aiming to stabilize the peso, which prompted some short-sellers to scale back bets on further weakness. "Chile has around $40 billion in reserves," said Guido Chamorro, a portfolio manager for Pictet Asset Management in London.
* Dollar boosted by better-than-expected U.S. data * Hopes of U.S.-China trade truce lift sentiment * Brazil's real falls for fourth straight day * Mexican peso struggles for direction By Shreyashi Sanyal Nov 27 (Reuters) - Major Latin American currencies fell on Wednesday, as the dollar firmed on better-than-expected U.S. economic data and optimism about a U.S.-China trade deal, while the Brazilian real declined for the fourth straight session. U.S. President Donald Trump said on Tuesday Washington and Beijing were in the "final throes" of an interim trade deal, fueling hopes a truce was possible by the end of the year and propelling global stocks to near-record highs. The Brazilian real fell again, even as the country's central bank intervened twice in the previous session to stymie a slump in the currency.
* Brazil Economy Minister relaxed about real's fall * Latin American currencies ease against a firmer dollar * U.S.-China officials hold phone call, discuss core issues * Argentina September GDP proxy figures eyed By Shreyashi Sanyal Nov 26 (Reuters) - The Brazilian real fell to a record low on Tuesday, a day after figures showed a widening current account deficit in Latin America's biggest economy, while other assets in the region were subdued as investors looked for fresh signs of progress in U.S.-China trade talks. The real slid lower than the level hit in 2015, when Brazil was mired in one of the deepest recessions in its history.
* Brazil's real slips after current account gap widens * Mexican peso eases after weak GDP data * Chilean peso breaks 5-day losing streak * U.S.-China trade rhetoric improves (Updates prices; adds quotes) By Medha Singh Nov 25 (Reuters) - Brazil's real weakened on Monday after data showed the current account deficit in Latin America's largest economy widened in October, while a report showing the Mexican economy was in a mild recession in the first half of 2019 pressured the peso. The slipped against a firmer dollar as central bank data indicated the current account deficit widened more than expected, to $7.9 billion as the trade surplus shrank. "The number was a little bit of a surprise," said Luiz Ribeiro, head of Latin American equities at DWS Group.
* U.S.-China trade deal "potentially very close" - Trump * Latam FX drops against a strong dollar * Trade deal hopes bolster stocks (Updates prices; adds quote, news items) By Medha Singh Nov 22 (Reuters) - Latin American stocks advanced on Friday as positive comments from Washington and Beijing eased investor concerns at the end of a week mired by conflicting headlines on a trade deal. U.S. President Donald Trump said a trade deal with China is "potentially very close", adding to earlier optimism after Beijing had said it wanted to work out an initial agreement with Washington. MSCI's index of Latin American stocks rose 0.6%, set to wrap up a week marked by conflicting messages surround a trade deal, marginally higher.
* Brazilian real, Mexican peso rise slightly * U.S.-China trade deal "potentially very close" - Trump By Shreyashi Sanyal and Sagarika Jaisinghani Nov 22 (Reuters) - Latin American assets edged higher on Friday as investors turned optimistic about a U.S.-China trade truce after U.S. President Donald Trump said a deal was "potentially very close", while Brazil's real firmed on hopes of more monetary stimulus. An index of Latin American currencies gained 0.6%, while a basket tracking the region's stocks firmed 1%. The Brazilian real rose 0.4% as the country's inflation fell to the second-lowest level in more than two decades, a figure likely to give the central bank extra cover to reduce interest rates again next month.