Macri Massacre Cuts Stocks In Half Today As Argentina Slides Into The Abyss

Update 2: In a stunning move, Argentina’s MERVAL stock index was cut in half today, crashing 48% in USD terms on the day.

Source: Bloomberg

As Bloomberg reports, this is the second-biggest one-day rout on any of the 94 stock exchanges tracked by Bloomberg going back to 1950.

Source: Bloomberg

“The market is starting to price in default,” said Edwin Gutierrez, the London-based head of emerging-market sovereign debt at Aberdeen Asset Management.

“The market is unwilling to give Fernandez the benefit of the doubt.”

by Tyler Durden


What happened

From The Wall Street Journal:

Argentines voted in a primary election on Sunday … A win for [Peronist candidate] Mr. Fernandez of more than 5 percentage points would raise fears among investors about a return to power of [his running mate ex-president Cristina] Kirchner.

Give the Journal credit — they called it.

Just a few hours after this story ran in Monday’s paper, an updated version on the web displayed the results for all to see: “In a nationwide primary, Mr. Macri received 32% support versus 48% for his opponent, Alberto Fernandez, with more than 99% of the ballots counted.”

That’s a win of considerably more than “5 percentage points,” and the predicted panic arrived right on schedule: Banco Macro S.A.‘s (NYSE: BMA) stock was down 49.4% as of 10:45 AM EDT, Grupo Supervielle S.A. (NYSE: SUPV) was down 53.2%, and Grupo Financiero Galicia (NASDAQ: GGAL) was down 55.3%.