Argentina's stock market has its worst day in decades
The Argentine peso fell 30% and its stock market sank 37% on Monday, the worst market collapse for the country in more than 2 decades. In dollar terms, Bloomberg reported it was the second-biggest 1-day rout on any of the 94 world stock exchanges it tracks since at least 1950.
Why it matters: Fund managers who have spoken to Axios over the past year say they foresee an economic collapse and wide-ranging debt defaults with President Cristina Fernández de Kirchner back at the country's helm, even as vice president.
- Some of the country's largest companies, including oil giant Pampa Energy and banking heavyweights Financiero Galicia and Banco Macro saw their shares fall as much as 47%.
- For context, imagine the dollar losing a third of its value and shares of ExxonMobil, Bank of America and Citigroup losing half of theirs in a day.
- The selloff was sparked by Sunday's primary election results showing challenger Alberto Fernández and former Fernández de Kirchner beating President Mauricio Macri by a wide margin.
The market could have seen this coming: The economy has been in recession for 3 of the 4 years Macri has been president, record inflation has increased and the government has slashed subsidies for the poor and implemented sky-high interest rates, choking off business.
- Macri also signed a $57 billion bailout deal with the IMF, the organization many Argentinians blame for the country's last economic collapse.
- Despite polls consistently showing Fernández beating Macri, the market was surprised by the magnitude of the victory and expectations have now solidified that the Peronist candidates will win October's election.