Analyst Weekly, March 23, 2026
Markets are more and more being pushed by a single pressure: power. As tensions within the Center East disrupt provide routes and push power costs increased, asset costs are shifting much less on fundamentals and extra on publicity to that shock.
On this setting, not all areas will react equally. These tied to power imports are going through strain, whereas exporters, and extra broadly, commodity-linked markets, are beginning to behave in another way.
Latin America: From excessive beta to macro lever
Latin America has traditionally been characterised as a higher-beta phase of worldwide equities. However to date in 2026, it has behaved in another way.
Whereas international equities wobble on geopolitics and fee uncertainty, Latam is quietly main rising markets, up round 7% year-to-date, supported by commodity publicity, bettering coverage dynamics, and nonetheless undemanding valuations.
That shift is just not coincidental. The present macro setting is more and more being pushed by power dynamics and supply-side shocks, and Latin America is structurally positioned inside that pattern. The chance sits on the intersection of a near-term macro shock and a longer-term structural shift towards actual belongings.
Valuations: a supportive backdrop
From a valuation perspective, the area stays constructive.
Markets throughout LatAm have de-rated in latest weeks, with most nations now buying and selling under their long-term common multiples, whereas earnings expectations have held comparatively regular.
In our view, this creates a extra balanced setup, the place,
Costs have adjusted
Earnings haven’t meaningfully deteriorated
Funding Takeaway: That mixture gives a level of valuation help, significantly relative to extra crowded international fairness markets.
Actual belongings are again in focus
On the core of the Latam story is its publicity to actual belongings.
The area is a key provider of:
Power (with a big share of worldwide reserves and exports)
Industrial metals comparable to copper (Chile, Peru)
Strategic supplies like lithium and uncommon earths (Chile, Argentina, Brazil)
In a market formed by provide constraints and geopolitical fragmentation, these exposures have regained relevance. Importantly, Latam indices are usually not impartial: power alone represents a significant share (round 9%) of the benchmark, permitting the area to translate commodity power instantly into fairness efficiency.
Funding Takeaway: For retail traders, this exhibits up throughout each indices and devices. Benchmarks like MSCI Latam and nation indices comparable to Brazil’s Bovespa or Mexico’s IPC mirror this commodity tilt. Entry might be gained by ETFs like iShares MSCI Brazil ($EWZ) and iShares Latin America 40 ($ILF), or through particular person names tied to the cycle.
Amongst these, large-cap exposures comparable to Petrobras, Vale, and Gerdau seize power and supplies, whereas corporations like Cemex supply leverage to infrastructure and development. On the identical time, extra domestically linked or cyclical names comparable to Embraer, Localiza, and LATAM Airways, mirror the restoration and progress aspect of the story.
Brazil because the portfolio anchor
Inside Latin America, Brazil stands out with:
Direct leverage to commodities
A central financial institution transitioning towards easing
Continued overseas investor participation
This alignment between exterior tailwinds (commodities) and home coverage (fee cuts) is comparatively uncommon throughout rising markets.
Flows have remained comparatively resilient, significantly in Brazil, suggesting positioning is constructing however not but stretched.
Brazil additionally represents a broad cross-section of alternatives on the inventory degree. Latest market volatility has led to pullbacks throughout a number of names, together with Embraer, JBS, Santander Brasil, XP, spanning industrials, shopper, healthcare, and financials.
For traders, Brazil usually turns into the core allocation, accessed by ETFs or diversified publicity to those giant and mid-cap names.
Understanding the chance
Latin America stays a cyclical allocation, with two key sensitivities:
A stronger US greenback
A deterioration in international threat sentiment
Traditionally, the area underperforms in periods of USD power, even when commodity dynamics stay supportive. A pointy reversal in oil costs or a sustained USD rally would seemingly weaken the relative case for the area.
From a portfolio perspective, this introduces a forex dimension to the commerce. Some traders could select to go away FX publicity unhedged to seize potential upside from commodity-linked currencies, whereas others could partially hedge FX threat to isolate the fairness part and cut back volatility.
Funding takeaway
For traders, Latin America is greatest understood as a selective allocation inside a broader portfolio, relatively than a standalone name.
It could possibly play a number of roles:
A diversifier away from US-heavy fairness publicity
A commodity-linked sleeve in a supply-driven macro setting
A differentiated entry level into rising markets, with distinct drivers
Implementation can differ, from broad ETFs and large-cap equities to extra thematic exposures.
Defensive Positioning Dominates, however the Structural Story Is Advancing
The crypto market is in a transition part the place weak sentiment contrasts with a strengthening structural backdrop.
Positioning is clearly defensive. Concern & Greed sits at 27 (worry), complete market cap has pulled again to ~$2.44T, and volumes stay reasonable, suggesting no aggressive dip-buying but. BTC dominance has risen to ~56.3%, reinforcing the thought of capital rotating into security whereas altcoins underperform.
ETF flows are additionally telling: weekly flows have are available broadly flat, pointing to a pause in institutional momentum relatively than lively accumulation. Mixed with retail risk-off habits, this explains the shortage of upside follow-through.
Underneath the floor, nevertheless, the structural story is advancing. The Readability Act is shifting towards a possible settlement within the U.S., with bipartisan help and lively negotiations between banks and crypto corporations, significantly round stablecoin yield.
Stablecoins are on the middle of this shift. Their rising position, particularly on Ethereum, highlights the place actual adoption is occurring. Capital is beginning to differentiate between belongings with precise utility and people pushed purely by narrative.
The long-term thesis stays intact: integration into the monetary system, enlargement of stablecoins, and rising institutional involvement. The market is just not totally pricing this but.
Technically, the setup is softer however nonetheless orderly. BTC dropping $70K opens a transfer towards $65K, with $55K as the important thing structural degree under. ETH wants to carry $2,000. These are reference zones that can decide whether or not this stays a managed correction or evolves right into a deeper transfer.
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