Media and LatAm Navel Gaze: May 22, 2017
President Trump started his overseas tour on Friday, beginning in Saudi Arabia where he delivered what some called a measured speech that was long on fighting terrorism (“drive them out”) but short on methods. That all amid bigger headlines at home where a special counsel was appointed to oversee an investigation if and how Russia played a role in the US elections and who among the administration may have been involved. Heads no doubt to roll and different tacts taken to try to change the narrative. One of the harshest critics over the weekend came from Peggy Noonan in The Wall Street Journal in her op-ed piece, “Democracy Is Not Your Plaything,” where she urged Republicans to call on Trump to “Stop it. Clean up your act. Shut your mouth. Do Your Job…”
- Roger Ailes, who lead the Fox network of “fair and balanced” to the top of the ratings and redefined cable news, died unexpectedly last week, prompting longform obits, biographies and news analysis for days that focused on his rise and fall;
- Ransomware became more of a household word as the global cyberattack strategy shut down banking, government and hospital systems as well as personal computers around the world;
- Tronc, owner of The Chicago Tribune and not the name of a video game, is out to buy its crosstown rival The Chicago Sun Times;
- The upfronts were front and center along with Megyn Kelly in her role as new NBC morning anchor trying to woo advertisers;
- Swedish prosecutors dropped their rape investigation, a seven-year ordeal, raising prospects that he may be freed from the Ecuador embassy in London;
- Ford is cutting 10 percent of its workforce;
- Huma Abedin finally filed for divorce from Carlos Danger, aka Anthony Weiner; and
- The Dow ended just slightly lower last week, closing Friday at 28,040.
- What is happening in Brazil? In a sign of just how influential media can be, Brazilian media conglomerate O Globo broke news that, as part of a plea bargain, executives at meat producer JBS, which had been under investigation for distributing sub-grade meat as part of a political bribery scandal, confessed that current Brazilian President Michel Temer was involved in a scheme to try and cover this up with bribe money. Stock markets reached their circuit limits in Brazil as equities plunged, and Mr.Temer’s status as president is now under question just weeks before he was set to push through major economic reforms, and barely 12 months after taking over for impeached ex-President Dilma Rousseff. This is the third major scandal to be uncovered as part of the country’s ongoing efforts to identify and impair corruption at the government level. The JBS scandal follows the Lava Jato (car wash) investigation that began by uncovering corruption at state-owned oil company Petrobras, which resulted in damages worth billions, and an ensuing investigation into Brazilian conglomerate Odebrecht, an extension of the Petrobras investigation, for similar corruption charges. The JBS scandal, known as Operation Carne Fraca (Weak Meat), began in early March, but most had not anticipated that President Temer was this closely involved. Brazil has been shaken at the core with this news, and the next few months will be very frantic as this gets more closely looked into.
- The Argentine government has received assurance from the Chinese government regarding financing the construction of the fifth Argentine nuclear power plant in Patagonia. The construction of the country's fifth nuclear power plant will require the hiring of 4,000 people, of which about 800 will arrive in Argentina from other countries of the world.
- On Thursday, Brazilian President Michel Temer rejected calls for his resignation, saying he will fight allegations that he endorsed the paying of hush money to an ex-lawmaker jailed for corruption.
- In Chile, shares of local companies in the Santiago Stock Exchange with presence in Brazil have been heavily impacted by the scandal. With Latam Airlines feeling the biggest hit, and shares falling by 6.45% to 7,484.8 points. Chilean stocks with Brazilian exposure will continue to be conditioned to Brazilian happenings including the political turmoil, consequently pressure could endure in the coming weeks.
- Mexico, expects to import 300,000 tons of yellow corn from Brazil this year, a record volume, after lower prices on supplier deals were secured during a recent visit to South America, as negotiations for NAFTA. The secured volume of corns from Brazil is almost five times more than last year’s imports.
- Also in Mexico, Glencore has signed an agreement with the G500 consortium to create a platform known as the G500 Network, which will supply about 12 percent of gas stations in the country. Formed in 2014, G500 is an association of service station owners, established in response to the deregulation of the Mexican oil industry. The decision follows the end of Pemex's decades-long monopoly in production, refining and marketing, including the retail market.
- Peruvian Banks, Banco de Credito del Peru (BCP) and BBVA Banco Continental, have been downgraded by Fitch Ratings, in line with the sovereign rating of the country. The agency downgraded BCP from its "a-" to "bbb +" viability rating (VR) and also cut its international issuer rating ("IDRs") to one degree - "to" BBB + ". In addition, Fitch Ratings said both ratings have a stable outlook.
- End of Week Market Updates
- Merval (Argentina): +0.52%
- Bovespa (Brazil): -18%
- IPSA (Chile): -20%
- IGBC (Colombia): -47%
- IPC (Mexico): -73%
- BVL (Peru): -02%