Marengo noted that since 1950, global production has tripled, driven by specialization and globalization. “The implementation of U.S. tariffs on Mexico and Canada is a serious setback,” he explained, highlighting that while all economies will feel the impact, the U.S. is likely to be the least affected in the short term.
For emerging markets, the situation is more precarious. The combination of a strengthening U.S. dollar and declining commodity prices creates a less attractive environment for these economies. “Capital will continue to flow toward higher yields in the U.S., leaving Latin America at a disadvantage,” Marengo explained.
Given this scenario, staying ahead of market dynamics requires a defensive and flexible approach. Marengo emphasizes three key strategies to mitigate risk and seize opportunities:
- Underweight positions in equity assets..
- Maximizing returns on the short end of the yield curve, which continues to offer attractive opportunities amid monetary policy uncertainty.
- Exploring alternative assets like gold, particularly in times of rising inflation risk or intensifying trade conflicts.
“Uncertainty will prevail,” Marengo concluded, stressing that the next moves in U.S. fiscal and trade policy will be pivotal for global markets. In this evolving context, constant portfolio adjustment and a focus on capital preservation are crucial for staying ahead of the curve.
Stay tuned for more expert insights on how to adapt your strategies to today’s fast-changing market landscape.
