Raytheon awarded $71 million in Navy contracts for missile systems
On Tuesday, strategists at JPMorgan expressed a positive outlook on Mexican equities, suggesting that any potential weakness in the Mexican peso (MXN) should be considered an opportunity for investors to increase their holdings in equities. This perspective comes after the Mexican currency experienced fluctuations, surpassing the Ps21.00 mark earlier in the day before correcting back to around Ps20.4. The adjustment followed the postponement of tariffs. The iShares MSCI Mexico ETF (EWW) has seen a 7.2% gain year-to-date, offering investors a substantial 6.3% dividend yield. InvestingPro data reveals the ETF has maintained dividend payments for 29 consecutive years, making it an attractive option for income-focused investors.
The Mexican Stock Exchange was not open on Tuesday due to the observance of Constitution Day. However, the S&P 500 Index closed the day with approximately a 1% decline. JPMorgan’s foreign exchange strategists have maintained their stance that the implementation of a 25% blanket tariff could lead to an 8-12% correction in the MXN. They caution that the market may not be fully prepared for such an outcome.
Despite potential currency volatility, JPMorgan’s strategists believe that Mexican equities are relatively shielded from the effects of export exposure, with less than 10% of the MSCI Mexico Index being export-sensitive. They argue that much of the potential impact is already factored into current equity prices.
The firm advises that while uncertainty may persist in the near term as trade negotiations continue over the next month, the current conditions present an attractive entry point for equity investments. JPMorgan has identified a list of preferred stocks for investors, including GFNORTEO, FIBRAPL, GCC, ASURB, AC, KOF, and CHDRAUIB, indicating these as top picks in the current market environment.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.