Market Musings 010326: Oil Breakout

Market Musings 010326: Oil Breakout

Podcast this week: A wind of Change in Latin America (click on link to listen)

Argentina’s President Javier Milei has delivered a landslide electoral victory, cementing his radical free-market reforms—a transformation strongly backed by the US as part of its broader strategy to reassert influence in the Western Hemisphere. If successful, Argentina’s model could ripple across the continent, inspiring similar shifts in Chile, Peru, and even Brazil.

Chile’s decisive turn to the right and Peru’s centre-right frontrunner suggest a regional pivot toward business-friendly policies, while Brazil—though still led by Lula—faces growing pressure for change. A pro-market shift in these economies would be a game-changer for equity markets, amplifying gains beyond commodity exposure and easing real interest rates.

Meanwhile, Mexico stands out as the region’s brightest star, benefiting from falling inflation, rate cuts, and accelerating GDP growth. Its undervalued equities—trading at a discount to both the Samp;P 500 and Asian peers—offer a compelling play on US growth without AI volatility.

With political tailwinds, strong US ties, and attractive valuations, Latin America is emerging as a high-potential alternative to tech-heavy Asian markets.

Oil breaks out of its 2022-25 downtrend

The current crude oil price integrates something like a $7-10/barrel risk premium according to JP Morgan....