Internacional archivos - Page 3 of 591

Zero-Sum Game: What Has Changed in the U.S. Stock Market?

The S&P 500 and the Nasdaq, Heavily Weighted in Tech, Reached New All-Time Highs a Week Ago, Driven by Positive News on U.S.–China Trade Talks That Boosted Investor Sentiment. UBS Global Wealth Management expects that, with companies reporting strong third-quarter results in a favorable environment, U.S. equities will continue to rise in the coming months.

In fact, they point out that the three key factors driving market performance—earnings, monetary policy, and investment—are currently favorable: “The Fed’s easing policy points to a supportive macroeconomic environment. The strong start to third-quarter earnings suggests solid profit growth. The strong demand for computing resources should support robust investment in artificial intelligence (AI),” they state. As a result, Mark Haefele, Chief Investment Officer at UBS Global Wealth Management, acknowledges that they maintain their “attractive” view on U.S. equities and expect the S&P 500 to reach 7,300 points by June 2026.

Could We Be Facing a Year-End Stock Market Rally? For Chris Iggo, Chief Investment Officer at AXA IM, “markets have continued to behave very benignly so far in October,” and he believes that “the earnings season will be strong enough to support the belief that current valuations are sustainable, which could allow for a potential market rally in November, a month that is usually strong for the S&P 500.” Looking ahead to the coming weeks, he highlights that “the market is strongly anticipating a Fed rate cut on October 29, followed by another before the year-end holidays,” in a context where “inflation fears have subsided.”

Room for Active Management

This market behavior reignites the long-standing debate over whether the U.S. large-cap market is too efficient for active managers to outperform. As concluded by Schroders in its latest report, many critics of active fund management use the zero-sum game argument to claim that it is mathematically impossible for active fund managers to outperform passive ones net of fees, which is “categorically false.”

“The increase in the number of investors and the value of investments not allocated according to overall market weightings means we can be more optimistic about the future of active management than we were about the past. It doesn’t mean the average fund manager will outperform, but it does mean it should not automatically be assumed that they can’t or won’t. Now is the time to reconsider your beliefs about active and passive management, even in markets you thought were efficient,” argue Duncan Lamont, Head of Strategic Research, and Jon Exley, Head of Specialized Solutions at Schroders.

The firm defends in its report that there may be greater opportunities for active managers to outperform in the future than in the past. In fact, it challenges the old formulation of the “zero-sum game” argument and adds that the classic view of the market as divided between active and passive investors should now include a new category: the “neo-passive.”

As Lamont and Exley explain, what has changed recently is the rise of investors who fall into this “active investor” category but are not active equity fund managers. “That’s why we believe we can have more confidence in the future prospects of active fund managers. First, there has been a proliferation of ETFs in recent years that do not follow the broad market. We call these ‘neo-passive.’ In the U.S. alone, there are now more than six times as many of these ETFs as traditional ETFs, and inflows into these strategies have been 50% higher than those into traditional ETFs from early 2018 to the end of July 2024,” they argue.

The Return of Private Stock Pickers

For the asset manager, another shift is the rise of the retail investor. “Accelerated by the move to commission-free trading at several major U.S. brokers, individual investor participation in the stock market has increased. This trend accelerated during COVID, when many people found themselves with more time and money on their hands. The GameStop saga brought trading and investing discussions to the table in many households. In 2023, the number of people with trading accounts at one of the four major brokers was more than double that of 2016,” explain Lamont and Exley.

They Also Acknowledge That While the Number of Monthly Active Users on Major Brokerage Apps Has Declined From Its Pandemic Peak, It Remains More Than 60% Above 2018 Levels. Unlike many other post-pandemic trends, Americans’ interest in investing has endured.

“Of course, many of these individuals may be buying S&P 500 ETFs, but the evidence suggests otherwise. Data from the Federal Reserve’s Survey of Consumer Finances shows that direct stock holdings as a proportion of total financial assets have increased to levels not seen since the peak of the dot-com bubble. This figure includes only directly owned stocks and excludes mutual funds or ETFs,” Lamont and Exley add.

Other Issues: Transactions
Lastly, the authors of the report point out that the other side of the zero-sum game argument that does not hold up in the “real world” is the idea that any investor can truly be “passive” in the sense defined by William Sharpe. In their view, it is simply not possible to earn market returns by allocating money according to the weightings of each stock in a benchmark index, then going to sleep and letting the market do the rest.

“What about initial public offerings? Or promotions or demotions from one market segment to another, such as large-cap versus small-cap? Or other changes, such as MSCI’s decision a few years ago to increase the proportion of Chinese ‘A-shares’ included in its major benchmark indices?” they point out.

Their opinion is that all these types of transactions create opportunities for wealth transfer from passive to active investors. “Active investors can trade ahead of index changes and then sell to passive investors when they become forced buyers. Index rebalancing leads to increased trading volumes and price variability in the affected stocks—something that is popular for certain active strategies to target. Active investors can also participate in IPOs, where passive ones generally do not, being forced to buy in the secondary market. All trades incur costs,” they conclude.

Alejandro Lara, New VP – Business Development at Constitution Capital

| By Amaya Uriarte | 0 Comentarios

According to information obtained by Funds Society, Alejandro Lara joins as VP – Business Development and will be in charge of business development for the alternative asset management firm in Latin America and the southeastern United States, promoting the offshore fund Constitution Access Fund, which is already available on the iCapital platform.

With offices in Boston and New York, Constitution is a value-oriented investment firm with top-quartile returns. It specializes in raising capital for small and mid-sized companies in the consumer goods and healthcare industries.

“The world of private capital is very broad,” Lara told Funds Society. “We believe there are great investment opportunities in the United States in this type of company to diversify portfolios by adding this asset class.”

“Private markets are on everyone’s lips. The opportunity we offer is to invest in and grow small and mid-sized companies, which make up a vast universe where a lot of value can be generated,” he added. The professional also served as a columnist on alternative investments for Funds Society.

Constitution was founded in Boston in 1998 by multiple partners with specialized and complementary backgrounds in private equity, direct capital, and opportunistic credit investments.

Based in Miami, Lara has more than 15 years of experience in the industry, primarily in client-facing roles focused on building private asset allocations. In 2019, he shifted his career from serving retail clients to supporting wealth advisors and institutional clients. He comes from Insigneo, where he worked for the past eleven years.

He holds FINRA Series 65 and Series 7 licenses and has a degree in Aerospace Engineering from Syracuse University.

Rubén Pérez-Romo, New Head of Business Development at OREI

| By Amaya Uriarte | 0 Comentarios

The real estate investor, developer, and asset manager based in Miami, One Real Estate Investment (OREI), has appointed Rubén Pérez-Romo as Head of Business Development to lead equity capital formation initiatives. He will bring a strategic approach to building strong investor relationships and developing capital solutions for the firm’s growing portfolio of multifamily properties, according to information obtained by Funds Society.

With over 27 years of experience gained at Banco Santander, OREI’s new hire, born in Mexico, specialized in managing high and ultra-high-net-worth clients as well as family offices throughout Latin America.

One Real Estate Investment focuses on multifamily development across the United States, with particular emphasis on Texas and the Southeast—Florida, Alabama, Georgia, Tennessee, Virginia, North Carolina, and South Carolina. Founded in 2001 by Jeronimo Hirschfeld, the company has grown into a fully integrated real estate investment platform with more than 30 professionals. The firm owns and manages a diversified portfolio valued at over $2 billion, comprising more than 11,000 multifamily units. The company has shifted its focus to ground-up development, operating through a vertically integrated model that oversees the entire process—from land acquisition and construction of 264 to 360 units per project, to the lease-up phase.

At OREI, the executive will leverage his experience to diversify the firm’s base of limited partner (LP) investors, originate new LP relationships, and create long-term, value-based partnerships. He will ensure that the firm’s investment opportunities align with investor needs while supporting the company’s growth and the development of institutional-quality multifamily assets in Texas and the Southeast U.S.

By combining decades of experience in banking and wealth management with OREI’s real estate platform, the former Santander executive will play a key role in connecting global capital with high-performing real estate.

Rubén Pérez-Romo began his career in London at Banco Santander and advanced through senior leadership roles such as Director of Trade Finance, Director of Large Corporates, and Director of Credit Markets, among others, in New York, Mexico, and Miami. He also launched and led the bank’s Houston office, establishing it as a regional leader with a focus on international (offshore) relationships.

He holds a bachelor’s degree in Political Science and Public Administration from Universidad Iberoamericana in Mexico and earned a Master’s in Finance and Economics from the University of Sussex.

Fed, ECB, and BoJ: The Diverging Monetary Challenges of the Major Central Banks

| By Amaya Uriarte | 0 Comentarios

Three major central banks held their October meetings, highlighting the divergence in their monetary policy approaches. David Kohl, Chief Economist at Julius Baer, succinctly summarizes the situation: “The Federal Reserve maintains a restrictive policy stance but is expected to ease due to signs of labor market weakness; the ECB sees limited need to act, as inflation is within target and growth risks are not particularly severe; and the Bank of Japan continues its accommodative policy, despite inflation being above target.”

A similar view is offered by Salvatore Bruno, Deputy CIO and Head of Active Management at Generali AM (part of Generali Investments). He focuses on the risk of the Federal Reserve losing its independence: the fiscal expansion promised by the Trump Administration requires low interest rates to limit the cost of debt interest payments, which already exceed 10% of fiscal revenues. This has created strong pressure on the Fed from the administration to resume the rate-cutting cycle. “It won’t be easy to resolve the conflict between the White House and the Fed before the expected change of the central bank’s chair in mid-2026. Nonetheless, there seems to be room for further rate cuts, though possibly fewer than the market expects,” the expert notes.

Regarding the ECB, Bruno sees a different scenario. The market does not anticipate further cuts, as inflation is expected to stabilize and growth prospects appear to have improved. He explains that investors will need to evaluate planned fiscal expansion — especially in Germany — and the potential spillover effects of French political tensions on local interest rates.

A Cinematic Take on Monetary Policy

José Manuel Marín Cebrián, economist and founder of Fortuna SFP, analyzes the current divergence among central banks through a cinematic lens, drawing on the film The Good, the Bad and the Ugly, starring Clint Eastwood.

In his view, the “good” is the ECB and its “monetary siesta”: Christine Lagarde, like a sheriff who has already cleaned up the town, has decided to let the dust settle. With CPI at 2.2%, she feels the job is done. No more cuts, no bailouts, no surprises. Rates stay where they are, and the message is clear: “We’ve done enough — now let others manage.” Meanwhile, the euro fans itself in the sun, the Frankfurt hawks toast with Riesling, and investors breathe easy (for now). The ECB appears disciplined, calm, and with a cool trigger finger. But like any desert hero, it could discover that danger also lurks in calm… especially if European growth gets stuck halfway between the desert and the saloon.

The role of the “ugly” goes to the Fed and its “dance with Trump”: Jerome Powell faces a tougher role. In his personal duel, he battles three foes — inflation, the labor market, and Donald Trump. Inflation has settled at 3%, employment is starting to show signs of weakness, and political pressure from Mar-a-Lago echoes even in the Fed’s hallways. The result is a script full of dilemmas. Powell promises two rate cuts for 2025 and four or five for 2026, trying to please everyone. But markets already suspect this dovish feeling could end in tragedy if inflation returns to the dance. Powell, sweating under his hat, keeps calm as he counts his rounds: each cut must be precise, or the dollar sheriff may lose control of the town.

Finally, Marín Cebrián casts the “bad” as the Bank of Japan and its “rusty revolver”: the eternal misunderstood villain. After decades of firing negative rates, it now seems ready for the unthinkable — raising them. The yen, once feared by none, is now moving like a runaway outlaw, and markets wonder if the BoJ will finally deliver justice to its inflation. The dilemma is classic: raise rates too fast and kill growth; don’t raise them, and the yen bleeds. The result is a Kurosawa-style script, with Zen economics, meticulous decisions, and a lead character who only fires after meditating for three days straight.

Marín Cebrián describes the final showdown in monetary terms: the good (ECB), the ugly (Fed), and the bad (BoJ) stand at the crossroads of the global economy. Lagarde watches calmly, Powell tries to keep his composure, and Ueda sharpens his monetary katana. “As always, the markets place their bets and wait for the first shot. Because in the global economy, the winner isn’t the fastest… but the one who holds their ground,” the expert concludes.

Federal Reserve

Following the latest rate cut in October, responses from financial firms have continued. Guilhem Savry, Head of Macro and Dynamic Allocation Strategy at Edmond de Rothschild Private Banking, sees long-term U.S. interest rates likely remaining higher than previously forecast. However, the end of quantitative tightening, he says, is a reason to support short-term bonds, while the Fed is likely to resume purchasing Treasury bills.

He notes significant disagreement within the FOMC, with some members citing the lack of official data as a compelling reason to avoid another rate cut in December. This divergence and the uncertainty around the Fed’s next chair “could complicate further rate cuts in the coming months,” though the expert still believes a December cut is likely, which should continue to support equity markets and U.S. government debt.

European Central Bank

Konstantin Veit, portfolio manager at Pimco, believes that after the ECB’s decision to hold rates steady, there is little justification for further monetary adjustments. He considers the 2% interest rate “a level likely seen as the midpoint of a neutral range by most Governing Council members.” He adds that Pimco tends to agree with the prevailing view within the ECB that medium-term inflation risks remain broadly balanced. Given the ECB’s reaction function is not geared toward fine-tuning, he still expects “a prolonged period of interest rate inaction.”

Sandra Rhouma, Vice President and European Economist on the Fixed Income team at AllianceBernstein, still anticipates a cut in December, but given the ECB’s latest stance and recent data, “the bar is now higher than it was a few months ago.”

Bank of Japan

The Bank of Japan also held rates steady, offering no surprises, according to Sree Kochugovindan, Senior Research Economist at Aberdeen Investments. The expert notes the overall tone of the press conference was dovish: spring wage negotiations remain the cornerstone of monetary policy direction, and Governor Kazuo Ueda expressed concern that sectors affected by tariffs — such as manufacturing — may struggle to raise wages.

Amid doubts over its independence, Ueda made clear that the BoJ will act in line with its mandate, not under political pressure. Even Prime Minister Takaichi reiterated the Bank of Japan Act, which legally enshrines the institution’s independence.

Kochugovindan maintains his view that the bank will wait at least until January to raise rates by 25 basis points, to 0.75%. “Beyond that, we see a very gradual pace of hikes, as the Bank of Japan will wait for domestically driven core inflation to accelerate,” he concludes.

The Cost of Financial Advice Varies Drastically Depending on the Model

| By Amaya Uriarte | 0 Comentarios

A new report by Vanguard, titled “Financial Advice Economics: What SEC Filings Reveal About Costs and Services”, sheds light on how the financial advisory market in the United States is structured and how much fees can vary for similar services.

The study analyzed more than 21,400 filings from 15,396 advisory firms registered with the SEC, which together manage about $128 trillion in assets, to identify patterns in costs, services offered, and operating models.

According to the analysis, robo-advisors — automated digital platforms — charge an average of 30 basis points (0.30%) on assets under management, while hybrid models (a combination of human advisor and technology) reach fees close to 85 basis points. Vanguard notes that 80% of hybrid advisory offerings charge between $225 and $1,500 per year to an investor with $100,000, which represents a cost difference of more than six times.

Although higher fees are expected to imply a more comprehensive service offering, the study did not find a direct and consistent relationship between price and breadth of services. Vanguard warns that many high-cost advisors do not necessarily include tax planning or behavioral advice, two of the areas with the highest added value for the investor.

Another key finding is that advice offered through the workplace (for example, in corporate retirement plans) tends to be more affordable and, in many cases, includes more services than traditional retail channels. This suggests that individual investors could benefit from taking advantage of employer-sponsored advisory programs, which typically have more competitive cost structures.

A Difference That Erodes Gains

The report, authored by Nicky Zhang, Fiona Greig, Andy Reed, Paulo Costa, and Malena de la Fuente, puts into perspective the effect of cost on long-term returns: a one-percentage-point (100 bps) difference in annual fees for a $100,000 portfolio can reduce the final value by approximately 25% after 30 years, assuming a gross annual return of 6%.

“Understanding what is being paid — and what is received in return — is essential. Transparency in fees and services is key for investors to make informed decisions,” the report emphasizes.

Vanguard recommends that investors carefully review the fees and services of their financial advisors and not assume that a higher cost guarantees superior service. It also suggests evaluating the advisory programs available through employment and confirming that the services offered are aligned with personal needs.

In an environment of economic uncertainty and increased digital offerings, the report concludes that efficiency and clarity in financial advice will be key to improving long-term investment outcomes.

JP Morgan Private Bank Adds Andrew Portillo in Miami

| By Amaya Uriarte | 0 Comentarios

J.P. Morgan Private Bank announced the addition of Andrew Portillo to its Latin America team as Executive Director & Wealth Advisor at its Miami offices.

“By joining our Latin America team in the Miami office, Andrew brings many years of experience in the international and domestic wealth advisory space to his new role, where he will serve the needs of our ultra-high-net-worth clients,” wrote Jessica Siqueira Manzano, Market Manager for the Northern Latin America region of J.P. Morgan Private Bank, in a welcome message to the professional on the social network LinkedIn.

Portillo is a lawyer specialized in tax and corporate law, with experience in local and international tax structuring for companies and family wealth. After earning a degree in Literature from Florida International University, Portillo obtained his Juris Doctor in Law from DePaul University College of Law, and also holds a Master of Laws from the University of Miami School of Law.

Before joining J.P. Morgan Private Bank, he worked as an attorney at Shutts & Bowen and Packman, Neuwahl & Rosenberg. In earlier stages of his career, he served as an associate at SMGQ Law – Sanchez-Medina, Gonzalez, Quesada, Lage, Gomez, & Machado – and at Alvarez & Marsal.

AI, Crypto, Private Markets… What Kind of Bubbles Might We See From Now On?

| By Amaya Uriarte | 0 Comentarios

Photo courtesyPilar Gómez-Bravo, Co-CIO of Fixed Income at MFS Investment Management

The market is experiencing a moment of effervescence: this year there have been multiple headlines about cryptoassets, capital expenditures (capex) related to artificial intelligence (AI), and the opportunities offered by private asset markets. But are any of these vectors currently in bubble territory?

Pilar Gómez-Bravo, co-CIO of fixed income at MFS Investment Management, has decades of experience that allow her to identify where cracks in the system may be appearing—ones investors should keep an eye on. During a recent presentation in Madrid, she emphasized that there is currently no red alert, though she encouraged investors to “make a list of the things that bother us and that we don’t fully understand,” stressing the importance of expectations versus the actual reach of these three market vectors, especially in regard to AI.

Gómez-Bravo offered several keys for identifying bubbles. First, she pointed out the importance of determining whether it is a productive bubble—one that leaves usable assets behind after it bursts—or not. She gave the example of the dot-com bubble, which left behind infrastructure like fiber optic cables that continued to be used for years. In contrast, with assets like gold or cryptocurrencies, price collapses leave behind few if any reusable elements. Therefore, another essential point in analyzing a bubble is evaluating whether there will be winners after it bursts.

How to Assess AI From a Fixed Income Investor’s Perspective

The key to understanding whether there is a bubble around AI—and whether it might burst soon—Gómez-Bravo explained, lies in the ability of companies directly linked to this trend to monetize their capex investments. In her view, current multiples have not yet reached the levels seen during the dot-com bubble.

According to her estimates, it would take $1 trillion in profits to justify current investment levels. Additionally, many MFS clients expect to see signs of monetization in the next 18 to 24 months.

“The U.S. consumer doesn’t want to pay for LLMs (large language models), and token prices are falling. That’s why the strategy is for companies to pay for their use,” she explained. However, profitability would come more from reducing labor costs—through layoffs or lower hiring—than from a direct increase in revenue.

She also warned of the social risks of AI, especially due to the high energy consumption of data centers, which raises electricity costs and impacts inflation. “There is a risk of a populist backlash, as the heavy electricity use by these centers affects the utility bills of nearby residents and could spark protests against the construction of new facilities.”

The Role of Private Markets in Financing AI

For Gómez-Bravo, the concern is not so much about high valuations or increased investment in AI-related infrastructure, but rather the emergence of a closed ecosystem in which the Magnificent Seven finance operations among themselves. As an example, she noted that OpenAI, still unlisted, has announced $500 billion in capex despite remaining in the red.

“AI growth is largely being financed with private debt,” she explained, noting that only half of AI investment is funded by cash flows. Currently, AI accounts for more than 14% of investment-grade (IG) debt.

The expert’s warning is clear: the bubble could take on a systemic character if the traditional financial system starts participating. “When banks begin financing private debt operations, the risk will increase.” She mentioned examples like J.P. Morgan and UBS, both of which have exposure to failed private deals such as First Brands, which recently defaulted.

“It will be crucial to monitor the correlation between bank balance sheets and the private market,” she emphasized, pointing especially to U.S. regional banks. “Private markets are neither good nor bad, but they involve systemic risks, lack regulation, and are not always transparent.”

She also flagged the rise in venture capital funding rounds conducted off-balance sheet—a sign of fragility that may take time to surface. She further warned about a new accounting issue: data centers are amortized over six years, while the chips that power them only have a two-year lifespan.

Cryptocurrencies and Stablecoins

Although she clarified that she is not a specialist on the subject, Gómez-Bravo shared reflections on the rise of cryptocurrencies, particularly stablecoins (digital currencies backed by dollars), whose access to retail investors has expanded following recent regulations.

The growth of stablecoins, she noted, implies captive demand for Treasuries, and the U.S. government has shown its intent to support this trend through new debt issuance. The only obstacle, she warned, could be the independence of the Fed, as its high-rate policy puts pressure on the short end of the curve—just as the U.S. Treasury increasingly relies on short-term issuance.

“For now, the Fed’s policy is not a problem, but in the future the rise of stablecoins could become a threat to Treasuries, which act as the collateral of the global financial system,” Gómez-Bravo concluded.

The Fed Sows Doubts About the Pace of Future Cuts

| By Amaya Uriarte | 0 Comentarios

Photo courtesyJerome Powell, Chair of the Fed

At Its October Meeting, the U.S. Federal Reserve (Fed) Cut Rates by 25 Basis Points, as Expected, Setting the Target Range for Federal Funds at 3.75%-4.0%.
For experts, the most relevant point was that the statement accompanying this decision reiterated concern about the labor market’s development, noting that “the risks to employment have increased in recent months,” while maintaining more moderate language regarding inflation, describing it only as “slightly elevated.”

Powell has emphasized data dependence in 12 unique speeches in 2025. For Alexandra Wilson-Elizondo, global co-CIO of Multi-Asset Solutions at Goldman Sachs Asset Management, the conclusion of this meeting is clear: policy has been set on “autopilot,” following the trajectory outlined by the dot plot, unless new reliable data changes the outlook.

“A single moderate inflation release, well-anchored expectations, and anecdotal signs of cooling support a cautious stance toward rate cuts. If conditions hold, another 25 basis point cut is likely at the December meeting,” says Wilson-Elizondo.

In the view of Jean Boivin, Head of the BlackRock Investment Institute, the Fed reaffirmed that the softening of the labor market remains a key factor. “We see a weaker labor market as helping to reduce inflation and allowing the Fed to lower interest rates. U.S. private sector indicators and state-level unemployment claims point to greater moderation in the labor market, although without a sharp deterioration that would raise concerns about a more pronounced slowdown. We are monitoring alternative data sources while we await the end of the government shutdown to analyze the September and October data for confirmation,” notes Boivin.

Upcoming Cuts

With this cut, justified by economic conditions, the Fed underlined its independence from political pressures. And despite having restarted the rate-cutting cycle, Powell was cautious during his remarks at the press conference following the meeting, stating that a rate cut in December is “far from a foregone conclusion,” which rattled markets that had already fully priced in a new cut.

“At the same time, the Fed acknowledged that the current government shutdown has limited access to economic data. This lack of visibility led the Fed to refrain from offering clear guidance on whether another cut will occur at the December 2025 meeting. Powell’s statements suggest that the Fed assumes the shutdown could extend through December 2025. Once the shutdown ends and macroeconomic data becomes available, we expect it to support a rate cut in December 2025,” adds Ray Sharma-Ong, Deputy Global Head of Multi-Asset Bespoke Solutions at Aberdeen Investments.

Tiffany Wilding, economist at PIMCO, interprets Powell’s clear statements on the December meeting as an effort to push back against market pricing. “Just before the October meeting, shorter-term federal funds futures contracts priced in a probability above 90% for a December cut. Powell’s comments worked. At the time of writing, the market-implied probability of a December cut has dropped to about 70%. A cut in December remains our base case, but with less certainty,” she explains.

Even with the Fed’s narrative around lack of data visibility, investment firms are confident that further rate cuts are coming. For example, UBS Global Wealth Management maintains its forecast of two additional cuts between now and early 2026—with improved liquidity continuing to support risk assets. For David Kohl, Chief Economist at Julius Baer, the October rate cut is a prelude to further reductions in the cost of money. “The FOMC reduced its benchmark interest rate and opened the debate about another cut at the next meeting. The differing stances within the FOMC and the lack of labor market data due to the government shutdown make it difficult to determine the interest rate path at this time. We continue to expect additional 25 basis point cuts at future FOMC meetings amid slower job growth,” he states.

“Powell also highlighted the two dissents in the FOMC decision as evidence that the Committee is not following a preset course. He reinforced this more hawkish tone by suggesting that data uncertainty. Looking ahead, we expect this lack of information to result in a more dovish stance. We foresee an additional cut before year-end, in line with this dynamic and with the revealed preference for a more accommodative stance, evidenced in the early end to QT,” adds Max Stainton, Senior Global Macro Strategist at Fidelity International.

The End of QT

In the view of Max Stainton, Senior Global Macro Strategist at Fidelity International, this accommodative (or dovish) stance was reinforced by the announcement of an early end to Quantitative Tightening (QT), now scheduled for December 1, with reinvestments in MBS to be redirected to Treasury bills starting on that same date.

“Although most analysts expected this announcement at the December FOMC meeting, recent tensions in funding markets appear to have unsettled the Committee about the possibility of increased interest rate volatility, caused by a slight shortage of reserves. Taken together, this continues to demonstrate the Fed’s shift toward greater attention to labor market developments,” he explains.

According to Eric Winograd, Chief U.S. Economist at AllianceBernstein, today’s decision to stop reducing Treasury holdings was not a surprise and should not have significant implications for markets or the economy. “The Fed will continue reducing its holdings of mortgage-backed securities (MBS), but maturities of these will be reinvested in Treasury bills, thus helping the Fed move toward a balance sheet composed solely of Treasury securities, as is its goal,” he indicates.

Regarding QT, he explains that it has largely proceeded as the Fed expected: in the background, with about $5 billion over recent months, and the change now announced is trivial. “Under the current framework for implementing monetary policy, the Fed seeks to maintain bank reserves at ample levels, which means not testing the lower bounds of the market’s tolerance for balance sheet reduction. In fact, the Fed’s balance sheet has already been reduced from a peak of approximately $9 trillion to the current $6.5 trillion,” he clarifies.

In essence, the end of quantitative tightening mainly affects the reserve structure and the functioning of the money market and says little about the future path of official interest rates. That said, the timetable outlined by the Fed disappointed markets, which were expecting earlier implementation in November 2025. “Equity and interest rate markets reacted negatively to Powell’s hawkish tone during the press conference, reinforcing the framework that bad news is good news: weaker economic data would likely lead to greater easing, which could support equity markets,” notes Sharma-Ong.

Vaca Muerta, the Promise of Dollar Generation

| By Amaya Uriarte | 0 Comentarios

Investment Opportunities for Argentina

As the second-largest shale gas reserve and fourth-largest shale oil reserve in the world, Vaca Muerta is crucial to Argentina’s economy. There is a tacit consensus between the ruling party and the opposition on the importance of its development—resulting in something nearly unprecedented in the country: continuity in public policies that encourage significant investment in this geographical area, despite the deep political divide that splits Argentina into two nearly irreconcilable halves.

Thanks to the production of unconventional hydrocarbons from Vaca Muerta, the South American country became a net energy exporter again in 2024.

In the early 2000s, the lack of clear regulations and a policy of frozen service tariffs led to disinvestment in the sector, turning Argentina into an energy importer—primarily of gas.

In the first half of 2025, the country recorded its highest energy trade surplus in the last 35 years: $3.761 billion, based on a 10.8% increase in exports and a 23.6% drop in energy imports, according to official data. Despite the international context—marked by a significant drop in oil prices—Argentina’s energy trade balance grew 53% compared to the same period in 2024.

By exporting energy, the country adds to the international currency it already generates through its agribusiness exports, which could translate into more employment and long-term economic stability for a nation plagued by recurring economic crises.

According to the study “El Campo Argentino en Números” by FADA (Agro Foundation for the Development of Argentina), agri-food and agribusiness exports contribute six out of every ten dollars of the country’s total exports.

Of the total dollars contributed, 62% come from agricultural manufacturing, 37% from primary products, and only 1% from inputs and machinery. During the first half of 2025, Argentina’s agro-industrial exports totaled $23.29 billion.

There is broad consensus that Vaca Muerta could generate up to $30 billion in annual exports by 2030—surpassing the current contribution of Argentina’s agricultural exports.

Vaca Muerta: Just a Promise for Investors?

Despite the strong figures, Vaca Muerta remains only a promise for investors in Argentine energy-related assets, according to market sources.

Luis Requesens, CIIA analyst and Managing Partner at Andes Wealth Management, a wealth management firm, does not see the sector as particularly attractive at the moment due to the oil price situation, which is causing companies to focus more on cost structures. In Vaca Muerta, “the idea is beautiful, but under current conditions, it’s not very profitable,” he says.

“The future looks bright, but today it’s all about outflows,” he elaborates. “So, we prefer investments with returns much closer in time.” Specifically, Andes WM is looking to Europe, where there is “an investment boom in renewable energy to avoid dependence on oil and gas from Russia.”

“In Argentina, you have to deal with a tax structure, with other cost structures, with higher interest rates, and local players are competing with the same shale oil and gas from the U.S. So yes, it’s a nice idea—but at best, it feels distant,” he says bluntly.

At Delphos Investment, Leonardo Chialva agrees: “Vaca Muerta is a puzzle with pieces still missing. Right now, it’s plateauing—there’s no way to get the oil out,” he says in reference to the new investments underway and those still needed. “And Vaca Muerta is highly sensitive to international oil prices. At the end of the day, it’s still a commodity, which fell 30% this year. Companies are starting to match their investments to their cash flows,” he concludes.

Meanwhile, energy expert Roberto Carnicier believes that in the long term, “the growth trend will not change. Betting on and continuing to develop Vaca Muerta is essential to unlock our economic history.”

For investors, the field remains a distant promise—the international context of commodity prices does not help.

The Export Potential of Vaca Muerta

“Despite internal and external challenges, Vaca Muerta has shown steady growth, evolving from a promise in the early 2010s to a clear and robust reality today—mainly due to the world-class geological quality of the reservoir,” notes PwC in its April 2025 report “Vaca Muerta: El Futuro de Argentina.”

In terms of shale gas, only China surpasses Argentina in available resources. For shale oil, Argentina ranks just behind Russia, the United States, and China.

At a national level, Argentina’s recurring challenge is its external constraint—the lack of foreign currency. This creates production bottlenecks in an economy with a structural demand for U.S. dollars due to inflation history and frequent peso devaluations.

Much of Argentina’s public and private debt is denominated in dollars, and the state needs foreign currency to pay interest and principal to international lenders and bondholders. If it cannot obtain these through exports, it must resort to new borrowing or use Central Bank reserves—fueling the economy’s vicious cycle.

With Vaca Muerta, Argentina could double its crude oil output in the coming years to reach 1 million barrels per day, potentially generating $18 billion in exports by 2026 and achieving a $12.5 billion energy trade surplus.

In terms of gas, Argentina could become self-sufficient and develop a strategic resource to support global decarbonization efforts. The country could export gas to the region—especially to Chile and Brazil—and eventually to global markets via a liquefied natural gas (LNG) plant, as detailed on the website of YPF, Argentina’s largest oil company and the main investor in Vaca Muerta.

Argentina expects an $8 billion energy trade surplus in 2025. “Before the construction of the (Presidente Néstor Kirchner) gas pipeline, the deficit was $4.5 billion, so we’re talking about an $11 billion turnaround,” says Daniel Gerold, head of G&G Energy Consultants and one of the country’s leading energy consultants, speaking to Funds Society. Private estimates place the 2025 surplus between $5 and $6 billion.

Roberto Carnicier, Director of the Energy, Gas, and Oil Program at Universidad Austral, states that with the six LNG shipping projects Argentina is developing in partnership with local and international firms, the country could generate over $13 billion annually.

In summary, there is consensus that Vaca Muerta could generate $30 billion in annual exports by 2030—exceeding the current contribution of Argentina’s agricultural exports.

More and More Investment

Carnicier emphasizes the key role of YPF and its current CEO, Horacio Marín, in Vaca Muerta’s development. Marín, who previously spent nearly 36 years at Tecpetrol (a subsidiary of the powerful Techint Group, led by businessman Paolo Rocca), has promoted strategic partnerships from day one with companies that provide both technical and financial capacity.

In the last seven years, YPF has partnered with international companies, and together they have invested over $11 billion since development began in Vaca Muerta.

In May 2024, construction began on the Vaca Muerta Sur oil pipeline, with an estimated $2.5 billion investment. It will allow the transport of 500,000 barrels of oil per day and includes the construction of a deep-water port in Río Negro. Also underway are the Duplicar and Triplicar projects by OldelVal (currently the main pipeline in the basin), the expansion of the Néstor Kirchner Gas Pipeline, and the reversal of the TGN Gas Pipeline, which will eliminate the need for gas imports from Bolivia, supply gas to northern provinces, and open an export route to Brazil.

“These projects, expected to be operational between 2025 and 2028, will be crucial to realizing the formation’s production plans by the end of the decade. But Vaca Muerta’s productive capacity will require even more infrastructure investment,” warns the PwC report.

“In Vaca Muerta, there are two types of investment,” explains Daniel Gerold from G&G Energy Consultants. “One is for increasing oil and gas production, and the other relates to infrastructure works, which require around $14 billion,” he adds.

Still, Vaca Muerta is exposed not only to the international price of oil but also to the global interest rate environment, which could jeopardize project financing. “Even if its development is delayed, Vaca Muerta is here to stay,” says Fernando Heredia, Economics and Energy Editor at Forbes and energy columnist for CNN Radio.

Vaca Muerta’s investment incentives have achieved the impossible: consensus between government and opposition on the strategic importance of developing these resources.

Carlos Rodríguez Aspirichaga Is the New Head of Citi Private Bank Mexico

| By Amaya Uriarte | 0 Comentarios

Citi Private Bank Mexico announced on the social network LinkedIn the appointment of Carlos Rodríguez Aspirichaga as the new head of the institution, responsible for driving growth strategies and ensuring financial solutions tailored to the needs of Ultra High Net Worth (UHNW) clients in Mexico.

“His knowledge of complex cross-border strategies and multiple jurisdictions for Mexican families will be key to strengthening our offering and service to our clients,” the note states.

Aspirichaga is a wealth management executive with more than 25 years of experience in building and expanding the high-net-worth segment in the United States and Latin America. The banker “advises international UHNW families on cross-border wealth strategies, with experience in investment architecture, credit solutions, and estate planning frameworks that work seamlessly across different jurisdictions,” according to his LinkedIn profile.

To date, Aspirichaga has been serving as a financial advisor at UBS in Miami, where he led cross-border strategies for Mexican families. Previously, he worked for eight years at JP Morgan Private Bank, leading the launch of the firm’s onshore private banking business in Mexico and advising UHNW clients from offices in New York and Miami. Prior to that, he held senior leadership roles at Santander Private Bank, where he led international wealth management teams, drove market expansion initiatives, and integrated global private banking platforms across the United States, Latin America, and Asia.