iShares Inc iShares MSCI Mexico ETF (ARCA: EWW)

Dernières nouvelles pour iShares Inc iShares MSCI Mexico ETF (ARCA:EWW)

iShares Inc iShares MSCI Mexico ETF

iShares MSCI Mexico Capped Investable Market Index Fund

Consumer Defensive

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The Fund seeks to track the investment results of the MSCI Mexico IMI 25/50 Index (the Underlying Index), which is a free float-adjusted market capitalization-weighted index that is designed to measure the performance of the large-, mid- and small-capitalization segments of the equity market in Mexico. The Underlying Index is rebalanced quarterly using an optimization process that aims to minimize the constituent weight differences between the Underlying Index and the MSCI Mexico Index (the Parent Index). The Underlying Index uses a capping methodology that limits the weight of any single group entity (constituents that MSCI determines have a control relationship) to a maximum of 25 Pecent of the Underlying Index weight, and the sum of all group entities with a weight above 5% to an aggregate of 50 Pecent of the Underlying Index weight. A group entity is a group of companies that operate as an affiliated corporate group but may separately issue listed securities.

Fomento Economico Mexicano Sab De Cv

iShares MSCI Mexico ETF

Emerging market stocks have dropped to levels last seen in mid-September, with the downturn exacerbated by Donald Trump's victory and a Republican sweep<a href="https://www.benzinga.com/topic/donald-trump"> of the U.S. Congress.</a>
The iShares MSCI Emerging Markets ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EEM#NYSE">EEM</a>) has slumped 7% over the past month, with the iShares MSCI China ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MCHI#NYSE">MCHI</a>) and the iShares Mexico ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EWW#NYSE">EWW</a>) underperforming — down 10.1% and 7.8%, respectively.
Trump&#8217;s win and full Republican control of Washington, D.C. raise critical questions for emerging markets (EM). What does a more protectionist U.S. policy and potential fiscal loosening mean for emerging economies, currencies and credit conditions?
<h1 class="wp-block-heading">Why Are Emerging Markets Falling?</h1>
Trump's election has sparked concerns over possible shifts in U.S. fiscal and trade policies that could have a ripple effect on global markets. 
&#8220;The prospects of looser fiscal policy and more trade protectionism have increased short- and long-term U.S. interest rates, putting upward pressure on borrowing costs in EMs,&#8221; according to Elijah Oliveros-Rosen, chief emerging markets economist at S&amp;P Global Ratings.
Higher U.S. interest rates tend to strengthen the dollar, making it more expensive for emerging markets to service dollar-denominated debt. This tighter financial environment has already started affecting emerging market currencies, which have weakened across the board against the dollar.
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="503" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/11/14120359/image-159-1024x503.png" alt="" class="wp-image-648524" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/11/14120359/image-159-1024x503.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/11/14120359/image-159-300x147.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/11/14120359/image-159-768x377.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/11/14120359/image-159-1536x754.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/11/14120359/image-159.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
<h1 class="wp-block-heading">EM Currency Depreciation: A Major Concern</h1>
Following Trump's win, most EM currencies — especially in Central and Eastern Europe and Latin America — have depreciated significantly against the U.S. dollar.
Investors worry the Federal Reserve may delay rate cuts in response to Trump&#8217;s policies, which could include new tariffs or stricter immigration rules. A stronger dollar and potential trade barriers pose serious risks for EM economies reliant on exports and foreign investment.
The Mexican peso, in particular, has been hit hard by Trump's election, as uncertainty over trade and immigration policies toward Mexico has made investors skittish. 
Private fixed investment in Mexico, which has been strong over the last two years due to nearshoring, could lose momentum until there's more clarity on U.S. policy.
&#8220;During the Trump 2016-2020 administration (excluding the pandemic), private fixed investment in Mexico declined 4.5%,&#8221; S&amp;P Global wrote in a report. 
<h1 class="wp-block-heading">Tightening Financial Conditions For EM</h1>
The rise in U.S. interest rates is tightening financial conditions for EMs, which rely heavily on affordable credit to finance growth. 
With borrowing costs rising, fiscal vulnerabilities in these markets could become more pronounced, potentially limiting governments' ability to stimulate their economies.
"Volatility in emerging market assets is expected to remain elevated for some time due to uncertainties surrounding U.S. policy details including trade, fiscal, and regulatory environment," said Oliveros-Rosen. 
Investors are likely to remain on edge until the new administration clarifies its approach, particularly toward trade.
<h1 class="wp-block-heading">Impact On Credit Ratings, Market Activity</h1>
The tightening financial environment is already impacting EM credit ratings.
 While the number of issuers rated ‘CCC+' and below has decreased slightly, indicating some deleveraging, many EM companies are still struggling with high debt levels. Riskier credits have been able to refinance for the first time since November 2021, but this could come at the cost of reduced capital expenditures in 2025-2026.
Corporate bond spreads in EMs remain tight, supporting robust market activity for speculative-grade issuers. With two months left in 2024, all EM regions — except for Asia — have already surpassed their average bond issuance volumes from the last seven years. Both benchmark and corporate yields have edged up amid the uncertainty, reflecting a more cautious investor sentiment.
<h1 class="wp-block-heading">Long-Term Outlook: Headwinds, Opportunities</h1>
Looking ahead, EMs face a mixed outlook. In the near term, "volatility in emerging market assets is expected to remain elevated for some time due to uncertainties surrounding U.S. policy details including, trade, fiscal, and regulatory environment,&#8221; S&amp;P Global wrote. 
Yet, demographics, technology, and the global energy transition could provide structural growth tailwinds over the next decade, potentially offsetting some of the risks posed by a protectionist U.S. stance. 
Supply-chain shifts and nearshoring trends, particularly in regions like Latin America, may also help some EMs attract investment.
As Oliveros-Rosen stated, "The specific policies announced by the next U.S. administration could either further amplify or reverse the recent tightening in financial conditions, with implications for EM growth and credit conditions."
In other words, the ball is in Washington's court. Whether EMs face a full-blown crisis or simply a period of adjustment will depend largely on Trump's policy choices in 2025.
Read Next:
<ul>
<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/11/41955977/trump-ignites-investor-optimism-for-growth-small-caps-us-dollar-bank-of-america-survey">Trump Ignites Investor Optimism For Growth, Small Caps, US Dollar: Bank Of America Survey</a></li>
</ul>
Photo: Shutterstock

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Emerging Market ETFs

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MCHI

Trump's Red Wave Pushes Emerging Market Stocks To 2-Month Lows: Volatility 'Expected To Remain Elevated'

News

Contracts

GSAT

Globalstar Wins 10-Year Terrestrial Authority From Mexico's Instituto Federal de Telecomunicaciones; Terms Not Disclosed

<a href="https://www.wsj.com/business/autos/stellantis-planning-to-make-ram-pickups-in-mexico-5f8b84ef" title="https://www.wsj.com/business/autos/stellantis-planning-to-make-ram-pickups-in-mexico-5f8b84ef">https://www.wsj.com/business/autos/stellantis-planning-to-make-ram-pickups-in-mexico-5f8b84ef</a>

STLA

The Wall Street Journal Reported Tuesday, Stellantis Planning To Build The Ram 1500 Truck In Saltillo, Mexico

- Reuters Citing Excerpt From Upcoming Detroit Speech

Legal

General

Trump To Say If Elected He Will Formally Notify Mexico, Canada Of His Plan To Invoke 6-Year Renegotiation Provision Of USMCA To Address Concerns About Chinese Auto Production

<a href="https://www.wsj.com/economy/trade/mexico-wants-to-curb-chinese-imports-with-help-from-u-s-companies-bf169302?mod=latest_headlines">https://www.wsj.com/economy/trade/mexico-wants-to-curb-chinese-imports-with-help-from-u-s-companies-bf169302?mod=latest_headlines</a>
&nbsp;
MEXICO CITY—Mexico wants to reduce its dependence on imports from China and is asking some of the world's biggest manufacturers and tech firms operating in the country to identify Chinese products and parts that could be made locally.
The administration of leftist President Claudia Sheinbaum, <a href="https://www.wsj.com/world/americas/mexicos-first-female-president-has-a-big-problem-her-mentors-legacy-8f0a8517?mod=article_inline">who took office</a> last week, wants U.S. carmakers and semiconductor manufacturers as well as global giants in the aerospace and electronics sectors to substitute some goods and components manufactured in China, Malaysia, Vietnam and Taiwan, said Deputy Trade Minister Luis Rosendo Gutiérrez.

'Mexico Wants To Curb Chinese Imports With Help From U.S. Companies; Government Seeks To Strengthen Domestic Supply Chains Amid Rising Trade Tension Between Washington And Beijing' - WSJ

MSFT

Microsoft To Invest $1.3B Over Next Three Years To Empower Mexico With Cloud And AI

<a href="https://www.youtube.com/watch?v=4jDyPMVkuh4">https://www.youtube.com/watch?v=4jDyPMVkuh4</a>
&nbsp;

TSLA

Former President Donald Trump Says We Will Put A 100% Tariff On Every Single Car Coming Across The Mexican Border

Vulcan Materials Says Expropriation Is Yet Another Escalation And New Violation Of Mexico's Commitments Under Regional Trade Agreements

U.S. Senators Seek To Deter Mexico From Taking Over Vulcan Port

On September 5, 2024, U. S. Steel, along with the United Steelworkers union ("USW") and Wheeling-Nippon, has filed antidumping and countervailing duty petitions with the United States Department of Commerce ("DOC") and the United States International Trade Commission ("ITC"), on imports of corrosion-resistant steel ("CORE") from Australia, Brazil, Canada1, Mexico, Netherlands, South Africa, Taiwan, Turkey, United Arab Emirates, and Vietnam.
Duane D. Holloway, Senior Vice President, General Counsel and Chief Ethics &amp; Compliance Officer of U. S. Steel, commented, "As we have for decades, U. S. Steel continues to lead the domestic industry in the fight against unfair trade on behalf of our workers, families, communities, and customers we serve. These new trade cases—the largest filed by U. S. Steel in nearly a decade—will address low-priced and subsidized CORE imports that continue to pour into the U.S. market. These cases aim to restore a level playing field and support our investments in Big River Steel's new dual coating line and second mini-mill in Arkansas, as well as U. S. Steel's CORE facilities across the country."

iShares MSCI Turkey Investable Market Index Fund

U.S. Steel, USW And Wheeling-Nippon Files Antidumping And Countervailing Duty Petitions With The U.S. DOC And The U.S. ITC, On Imports Of Corrosion-Resistant Steel From Australia, Brazil, Canada, Mexico, Netherlands, South Africa, Taiwan, Turkey, United Arab Emirates, And Vietnam

BYDDF

BYD Americas Head Says Firm Has Not Postponed Any Decision About Mexico Plant

<a href="https://www.bloomberg.com/news/articles/2024-09-03/china-s-byd-said-to-pause-mexico-plant-until-after-us-election?srnd=phx-technology">https://www.bloomberg.com/news/articles/2024-09-03/china-s-byd-said-to-pause-mexico-plant-until-after-us-election?srnd=phx-technology</a>
&nbsp;
China&#39;s top electric-vehicle maker <a href="https://www.bloomberg.com/quote/1211:HK">BYD Co.</a> won&#39;t announce a major plant investment in Mexico until at least after the US election, according to people familiar with the matter, as shifting American policy forces global businesses into wait-and-see mode.
BYD was scouting three locations for a car production facility in Mexico but has stopped actively looking for now, several of the people said, asking not to be identified discussing information that&#39;s private.

XPEV

'China's BYD To Pause Mexico Plant Until After U.S. Election' - Bloomberg News

The Mexican peso experienced a positive trading session on Wednesday, advancing 0.5% against the U.S. dollar by 3:00 p.m. ET as President Andrés Manuel López Obrador (AMLO) clarified in a press conference that Mexico&#8217;s diplomatic relationships with the United States and Canada remain intact, while emphasizing that the pause in relations applies only to the embassies of <a href="https://www.benzinga.com/government/24/08/40587519/mexican-stocks-plummet-peso-drops-to-20-month-lows-as-investors-run-from-judicial-reform">both countries within Mexico.</a>
As reported by local newspaper El Economista, AMLO stated, &#8220;The pause in relations is specifically with the Canadian Ambassador (Graeme C. Clark) and the U.S. Ambassador (Ken Salazar) because they should not comment on matters that only concern Mexicans. It is a matter of respect for our country.&#8221;
<h3 class="wp-block-heading">Investor Concerns Over Judicial Reform Persist</h3>
The peso&#8217;s 0.5% gain on Wednesday followed a sharp 1.9% selloff on Tuesday, the steepest one-day decline in two months. The selloff was triggered by negative market reactions to the announcement that Mexico had temporarily halted diplomatic relations with the U.S. and Canada.
Despite the peso&#8217;s recovery, concerns still linger among investors regarding AMLO&#8217;s proposed judicial reform, which aims to subject judges, magistrates, and ministers to popular elections. Critics argue that this reform could lead to the politicization of the judiciary and increase the risk of corruption.
AMLO responded to these concerns by dismissing U.S. diplomats&#8217; warnings that the direct election of judges could threaten Mexico&#8217;s democracy and economic integration with the U.S. and Canada. &#8220;Democracy is about the participation of the people, that the people choose, not the elites of economic or political power,&#8221; the Mexican president said Wednesday
AMLO plans to present the judicial reform to Congress for approval in September, the final month of his term. The reform &#8220;creates an uncertain investment outlook in Mexico,&#8221; as indicated by the Mexican Chamber of the Construction Industry (CMIC) on Wednesday. 
The ruling MORENA coalition, which will be led by incoming President Claudia Sheinbaum, currently holds a two-thirds majority in Congress, allowing them to pursue constitutional reforms.
Investor sentiment towards Mexican assets remains in a precarious state. The peso has already lost 16% of its value against the dollar since late May, primarily due to rising domestic political risks, while Mexico&#8217;s main stock market index has shed nearly 10% of its value during the same period. 
U.S.-listed Exchange-traded funds (ETFs) focused on Mexican equities showed mixed performance on Wednesday. The iShares MSCI Mexico ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EWW#NYSE">EWW</a>) gained 0.1%, while the Franklin FTSE Mexico ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FLMX#NYSE">FLMX</a>) slipped 0.4%.
Last month, Fitch Ratings affirmed Mexico&#8217;s sovereign credit rating at &#8216;BBB-&#8216; with a stable outlook. While Fitch noted that the judicial reform could negatively impact Mexico&#8217;s institutional profile, the agency also mentioned that it is too early to assess the full severity of the potential changes before they are approved and implemented.
Read Next:
<ul>
<li><a href="https://www.benzinga.com/markets/cryptocurrency/24/08/40607469/us-stocks-chipmakers-fall-ahead-of-nvidia-earnings-berkshire-hits-1-trillion-super-micro-c">US Stocks, Chipmakers Fall Ahead Of Nvidia Earnings, Berkshire Hits $1 Trillion, Super Micro Computer Sinks: What&#8217;s Driving Markets Wednesday?</a></li>
</ul>
Photo: Octavio Hoyos/Shutterstock.com<a href="https://api.whatsapp.com/send?text=https%3A%2F%2Fwww.eleconomista.com.mx%2Fpolitica%2FAMLO-aclara-que-las-relaciones-con-EU-y-Canada-continuan-solo-hay-pausa-con-los-embajadores-20240828-0036.html" target="_blank" rel="noreferrer noopener"></a><a href="https://twitter.com/intent/tweet?text=AMLO%20aclara%20que%20las%20relaciones%20con%20EU%20y%20Canad%C3%A1%20contin%C3%BAan%3B%20s%C3%B3lo%20hay%20pausa%20con%20los%20embajadores&amp;url=https%3A%2F%2Fwww.eleconomista.com.mx%2Fpolitica%2FAMLO-aclara-que-las-relaciones-con-EU-y-Canada-continuan-solo-hay-pausa-con-los-embajadores-20240828-0036.html" target="_blank" rel="noreferrer noopener"></a><a href="https://www.facebook.com/sharer/sharer.php?u=https%3A%2F%2Fwww.eleconomista.com.mx%2Fpolitica%2FAMLO-aclara-que-las-relaciones-con-EU-y-Canada-continuan-solo-hay-pausa-con-los-embajadores-20240828-0036.html" target="_blank" rel="noreferrer noopener"></a><a href="https://www.linkedin.com/sharing/share-offsite/?url=https%3A%2F%2Fwww.eleconomista.com.mx%2Fpolitica%2FAMLO-aclara-que-las-relaciones-con-EU-y-Canada-continuan-solo-hay-pausa-con-los-embajadores-20240828-0036.html" target="_blank" rel="noreferrer noopener"></a>

Latin America

Forex

FLMX

Peso Selloff Pauses As Mexican President Addresses US, Canada Relations, Targets Ambassadors Over 'Respect For Our Country'

Mexican financial assets have come under significant selling pressure on Tuesday as investors react negatively <a href="https://www.benzinga.com/topic/mexico">to domestic political developments. </a>
Concerns are mounting over a judicial reform proposal, which many see as a threat to judicial independence and a potential compromise to justice and democracy in Mexico.
The iShares MSCI Mexico ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EWW#NYSE">EWW</a>) fell 2.8% by 3:15 p.m. ET, following a 2.3% decline the previous day. The Mexican peso also took a hit, plunging to 19.73 per U.S. dollar, marking its lowest level since late December 2022.
<h3 class="wp-block-heading">The Controversial Judicial Reform</h3>
In February 2024, Mexican President Andrés Manuel López Obrador (AMLO) introduced a highly controversial judicial reform proposal aimed at overhauling the nation's judicial system. The proposed changes include the introduction of popular elections for judges, including those on the Supreme Court, and a significant restructuring of the judicial system's oversight.
The reform has ignited intense political debate and is expected to face a critical vote in Congress by September 2024. This vote comes as AMLO enters the final months of his presidency. 
President-elect Claudia Sheinbaum, who holds a &#8220;supermajority&#8221; in Congress, has voiced strong support for the reform, signaling it will be a priority for her administration.
<h3 class="wp-block-heading">Diplomatic Tensions Rise Amid Concerns Over Judicial Independence</h3>
Tensions between Mexico and the United States have escalated over the judicial reform. 
AMLO stated on Tuesday morning that relations with the U.S. Embassy in Mexico are &#8220;on pause&#8221; following critical remarks from U.S. Ambassador Ken Salazar regarding the proposed changes. Salazar has expressed serious concerns, noting that the reforms could undermine the rule of law in Mexico.
&#8220;Based on my lifelong experience supporting the rule of law, I believe popular direct election of judges is a major risk to the functioning of Mexico's democracy. Any judicial reform should have the right kinds of safeguards that will ensure the judicial branch will be strengthened and not subject to the corruption of politics,&#8221; Salazar said in a statement.
One of the most contentious aspects of the reform is the proposal to elect judges by popular vote, which critics argue could compromise the integrity of the merit-based selection process.
As stated by local Mexican newspaper El Economista, the International Association of Judges (IAJ) has also voiced deep concern, stating that the reforms could jeopardize judicial independence and contravene widely accepted international principles.
<h3 class="wp-block-heading">Rating Agencies, Investment Banks Reject Reform</h3>
The proposed reforms have also raised alarm within the financial sector. AMLO has dismissed warnings from international rating agencies and investment banks regarding the potential economic impact of the judicial reform.
&#8220;Hindering those counterweights weakens certainty, which is valuable for companies when evaluating their investments in the country,&#8221; said David Crisóstomo, director of research and analysis at S&amp;P Global Commodity Insights.
&#8220;The proposed judicial reforms in Mexico could negatively affect the investment appetite and business environment of non-financial corporates if their implementation impedes the autonomy and quality of the judicial system,&#8221; Fitch Ratings said last month.
Fitch Ratings raised concerns that Mexico&#8217;s proposed judicial reform could dampen nearshoring opportunities to the United States, particularly in sectors tied to manufacturing, export-oriented industries, and industrial real estate. The rating agency warned that, under this scenario, Mexican companies might experience a more challenging operating environment characterized by slower economic growth. 
Last week, Morgan Stanley downgraded its recommendation on Mexico to Underweight, implying that the country's stocks are expected to underperform relative to the region. This downgrade came in response to the proposed judicial changes, reflecting broader concerns about the country's economic stability.
Read now: 
<ul>
<li><a href="https://www.benzinga.com/markets/equities/24/08/40581306/can-regional-banks-outperform-large-institutions-as-fed-rate-cuts-loom-small-banks-are-plenty-ch">Can Regional Banks Outperform Large Institutions As Fed Rate Cuts Loom? &#8216;Small Banks Are Plenty Cheap,&#8217; But&#8230;</a></li>
</ul>
Photo: Richie Chan/Shutterstock.com

Government

Mexican Stocks Plummet, Peso Drops To 20-Month Lows As Investors Run From Judicial Reform

Mexico President Says There Is "Pause" In Relationship With U.S. Embassy In Country After Ambassador's Comments On Proposed Judicial Reform

Mexico President Says 'There Is Nothing Rational' That Could Cause A Break In Trade Integration With The United States

President Of Mexico Says Tesla's Musk's Comment On The Possibility Of Not Investing In Mexico "Is Not Serious", Saying He "Must Have Another Business Plan"

Arcelor Mittal Asks Mexican Authorities To Enforce Rule Of Law And Guarantee Security In The Municipality Where It Operates

President Of Mexico Will Send Letter To Former President Donald Trump About Migration And The Importance Of Economic Integration, Says Donald Trump "Is Not Well Informed"

Fitch Affirms Mexico's Long-Term Foreign-Currency IDR At 'BBB-' With Stable Outlook; Notes Proposed Judicial Reforms Could Negatively Impact Institutional Profile; Uncertainty Over Incoming Administration's Efforts To Narrow Deficit Consistent With Stable Debt/GDP; Expects Economic Activity To Pick Up For Rest Of Year After Weak Q1; Anticipates Slight Slowdown In Economic Growth Next Year

Investment Opportunities In Mexico

Political change can create uncertainty, so it is useful to analyze past periods to identify trends and gain insights on the effects of similar events.

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iShares Inc iShares MSCI Mexico ETF

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