EM LATAM CREDIT: Argentina: Private-Sector USD20bn – Positive
(ARGENT; Caa1/CCC/CCC+)
• This appears to be an attempt to effectively access the international market by private means as U.S. Treasury Secretary Bessent refers to a second USD20bn plan for Argentina to be funded by the private sector, according to Bloomberg, to refinance debt coming due next year.
• ARGENT 35s are up about 1.7 points today after retreating late yesterday on concerns that U.S. aid could be halted if Milei’s LLA party performs poorly in the October midterms. President Milei and Economy Minister Caputo were quick to point out that U.S support would likely continue when Milei was in power which is expected to be until 2027.
• Bessent reportedly said that they had been working on this private sector financing plan for weeks with sovereign wealth funds and private banks. The US Treasury Secretary was also quoted as saying the US Treasury bought Argentine Pesos in the open market this morning and if the country continues to enact good policy they will have US support, according to Bloomberg quoting Axios.
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US STOCKS: A Minor Dip Off All-Time Highs, Alphabet The Fourth $3tn Company
- ESZ5 has softened a little in recent trading but at 6672.00 (+0.4%) still trades close to its earlier fresh all-time high of 6681.25, with gains at the time extended by Trump suggesting a move to semi-annual reporting for corporates.
- Next resistance is seen at 6685.25 (1.00 proj of Aug 1-15-20 price swing) after which lies the round 6700. Support meanwhile isn’t seen until 6546 (20-day EMA).
- Some large idiosyncratic moves at play include Tesla (+5.6%) after Musk bought ~$1bn of shares, Alphabet (+3.3%) having become the fourth extending company with a market cap in excess of $3trn after building on previous gains from a recent antitrust ruling and Oracle (+3.3%) attributed to data center construction expectations along with Seagate Technology up 7.8%. Other notable gains include Amazon (+1.6%) and Apple (+1.0%).
- Nvidia meanwhile is back to flat, gaining intraday with a lack of fresh headlines at the China trade delegation press conference after Bessent-He talks. It had dragged pre-market and earlier in the session after China said it violated antitrust regulations with its acquisition of Mellanox.
- Leaders: Communication services (+2.0%), consumer discretionary (+1.4%) and IT (+0.5%).
- Laggards: Health care (-1.0%), consumer staples (-0.8%) and materials (-0.6%).
- The tech-heavy nature of day’s gains unsurprisingly sees NDQ outperform at +0.65% (20 pts off earlier all-time highs of 24274.80). The Russell 2000 also performs well (+0.4%) whilst the Dow Jones lags (+0.05%).
COMMODITIES: Gold Hits Fresh All-Time High, WTI Crude Climbs
- Gold has rallied to a fresh all-time high on Monday amid broad dollar weakness ahead of Wednesday's FOMC meeting, when a 25bp rate cut is widely expected. Bullion may also be benefitting from continued Fed independence concerns after President Trump called again for rates to be cut.
- Spot gold has risen by a further 1.0% to $3,681/oz, taking total gains this month to almost 6%.
- Gold remains in a clear bull cycle, with the break higher confirming a resumption of the primary uptrend. Above here, attention turns to round number resistance at the $3,700 handle, followed by $3,716.5, a Fibonacci projection.
- Similarly, silver has also rallied by 0.9% to $42.6/oz.
- Trend signals in silver remain bullish, with today’s move piercing resistance at $42.606, a Fibonacci projection. Above here, next resistance is seen at $42.974, the 2.382 projection of the Jul 31 - Aug 14 - 20 price swing, followed by $43.000 round number resistance.
- Meanwhile, WTI crude is also trading higher, with the market weighing the impacts of further Ukrainian drone attacks on Russian energy infrastructure.
- WTI Oct 25 is up by 0.9% at $63.3/bbl.
- Despite the move, a bear cycle in WTI futures remains intact and short-term gains are considered corrective.
- Initial resistance to watch is $66.03, the Sep 2 high. Initial support is at $61.29, the Aug 13 low and the bear trigger.
