Some Latin American countries may benefit from aid given by the International Monetary Fund (IMF) and Mexico’s economy could fall ill to the new swine flu. Be it good or bad, related exchange traded funds (ETFs) could help gauge the effects.
In the past, Latin American countries like Argentina, Bolivia and Ecuador have all publicly denounced the IMF, write Juan Forero and Joshua Partlow for The Washington Post. The treasuries of Latin American countries were also full from being nations rich in resources and commodities.
After being thrashed by the financial crisis, these countries are now softening up to the IMF assistance. The IMF is the only source that is able to provide copious amounts of cash to aid seeking countries.
Economists estimate that Ecuador needs as much as $2 billion to help bridge a $3.5 billion trade deficit. More recently, Colombia, Costa Rica, El Salvador and Guatemala are queuing up for loans, and Mexico is getting $47 billion.
In Brazil, the pace of rate cuts is slowing as more signs that the crisis is backing off have emerged, report Joshua Goodman and Andrew Soliani for Bloomberg. The country recently experienced its deepest quarterly contraction on record, but companies are now re-hiring workers and car sales jumped 17% in March.
In Mexico, the deadly influenza has reduced consumer shopping, reports Ken Jones for The Wall Street Journal. For a couple of weeks and possibly longer, if the flu drags on indefinitely, the travel, tourism and entertainment sectors could be negatively affected.
Retail sales were down 8.6% in February compared to the same month last year. Economists had previously projected a 3.3% contraction in the economy.
- iShares S&P Latin America 40 Index (ILF): up 18% year-to-date
- iShares MSCI Mexico Investable Mkt Idx (EWW): down 1.2% year-to-date
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.