Between a rock and a hard place: local and foreign outlooks

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By Carlos Fontana
Columnist for Ámbito Financiero

The local stock exchange had no choice but to find comfort in the world outlook -terrible- and there was certainly much of this in the mix of components.

However, local conflicts do not pass unnoticed: the country-risk thermometer does not lower its temperature, the tax on checks is in a war zone as well as market operations, and trading volume undergoes an evident depreciation.

Stocks acted bearly with $13 million cash, fixed income trimmed its sum several times and only the dangerous front of "guarantees" saw amounts of money that foresee problems if the fall continues.

Given the fact that the system of reinstatement of guarantees acts as trigger, if it falls in a forced liquidity it will contribute to get the fire, which consumes bearish stocks, going.

Without a visible floor

Everything was very bad, as NASDAQ fell and reached levels similar to those of 1999, dragging everything along and turning the day into a "black Tuesday" which made the local fall more bearable.

M.Ar fell 2.9%, Merval index 2.5%. The falls were not so important given that in case of liquidity squeeze the indexes can get their way and punish stocks, though they may not deserve it.

The week's future is quite uncertain and seems difficult due to that loss of direction and to the fact that floors are not at hand throughout the world. Much less here.

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