Speculators seeking to profit from the selloffs racing through Argentina’s markets were stopped dead in their tracks by a powerful investor willing to take the opposite side of the trade: The US government.
The strong show of support for President Javier Milei from US Treasury Secretary Scott Bessent — first by pledging to use “all options,” and then by announcing a plan to potentially provide a $20 billion lifeline and buy Argentina’s bonds — quickly halted a rout that was burning through the government’s reserves as it fended off a run on its currency.
Whether the money materializes or not, investors said the prospect alone will likely be enough to put a floor under Argentina’s stocks, bonds and currencies ahead of key national elections late next month. That’s because few, if any, are willing to stand behind a bearish bet that could get blown up by another US signal of support.
“That’s an outsized package and coming from Scott Bessent — who understands markets — it should stabilize here,” said Ray Zucaro, chief investment officer at RVX Asset Management LLC in Miami, who currently has a neutral view on Argentina’s bonds. “It is hard to be short.”
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