The United States intervention in Venezuela is under the market’s focus. The stock markets have just recorded their most volatile session after the capture of Nicolás Maduro and the takeover of the Venezuelan oil industry by Washington, a control that Donald Trump has said could last «years.» «Only time will tell»acknowledged the American president in an interview with ‘The New York Times’. Despite everything, the truth is that the stock markets seem not to have noticed this shock. The majority of large cities in both hemispheres maintain a positive trend since the US military operation. Especially benefited have been companies in the defense sector, which have seen their prices gain momentum after Trump’s threats to Greenland and other Latin American countries.
Commodities have also risen, as have other traditional havens. Oil has done a little worse, which has not yet found a direction despite the US plans, which they don’t convince everyone. However, analysts focus more on the effects that this tectonic movement will have on the market in the long term, with opinions largely aligned, although with nuances.
THE FUTURE OF THE MARKET
Anthony Willis, senior economist at Columbia Threadneedle Investments, believes it’s a good start that the situation is not as volatile as might have been feared. When geopolitical shocks occur, markets «tend to suffer an initial decline before fundamentals quickly reaffirm.» «I think this measure (the oil plan), from the perspective of the US Administration, could be beneficial: midterm elections are comingand the lowering of oil prices and interest rates will be beneficial from an electoral point of view,» he points out. «I think we must be positive from the markets’ point of view and, despite the current geopolitical uncertainty, the outlook remains optimistic: global growth is resilient and fiscal stimulus to extend the cycle in the US, Europe and Japan is underway or in the process of being implemented. Monetary policy remains favorableas we expect further rate cuts in the US and the UK in the coming months. In Japan, the narrative is based on new hikes that will be implemented slowly and steadily. Against the backdrop of strong earnings growth, we still see many questions around tariffs, artificial intelligence and high valuationsbut we must remember that fundamentals remain favorable and that the global economic outlook for 2026 is relatively optimistic. In short, there are many reasons to be optimistic at this time,» he adds. In turn, Jack Janasiewicz, portfolio manager at Natixis IM Solutions, rules out that these events are going to have a «significant impact» in the long term. According to this expert, the implications derived from these actions have «really nothing to do» with «the S&P 500’s recent gains»and classifies them as «background noise». «Just another in a long line of incidents that have trained investors to look beyond the geopolitical noise«he says. There are more doubts about what this may mean for other less developed markets. Mali Chivakul, an economist specializing in emerging markets at J. Safra Sarasin Sustainable AM (JSS SAM), believes that the population of neighboring countries, even those that have questioned the legality of Washington’s actions, welcome a regime change in Venezuela, whose immigration has been «strongly associated» with the increase in insecurity and gang violence. Likewise, he points out that it is «likely» that the United States United openly support like-minded candidates, such as Milei in Argentina or Kast in Chile, in the upcoming elections in Colombia, Peru and Brazil. «If they win at the polls, the markets of these countries should also benefit,» he adds. «At the end of the day, it is. a way to reaffirm the indisputable role of the United States in the region«On the positive side, this supports our exposure to the distressed bonds of PDVSA, the state oil company. Expectations of a further recovery in bond prices are based on the rebound in oil production and the prospect of reaching levels significantly above current levels. Returning to maximum production levels will require years of investment,» adds Ratto. The problem, according to different media and analysts, is that not all oil companies are so clear. According to different media, companies such as Exxon Mobil or ConocoPhillips are seeking guarantees that the investments they make in the Latin American country are safe and an expropriation such as the one carried out in the first decade of the current century will not be repeated. In any case, Ratto points out, it will be necessary to restructure Venezuela’s debt. To do this, this expert emphasizes, it is necessary to take into account the total stock of debt, including accumulated arrears, and take into account the bilateral oil-backed loans granted by China and Russia. «According to our estimates, The current stock of debt should be between 190,000 and 200,000 million dollars Americans. In the not-so-distant scenario in which oil-backed loans are called into question, the current structure of creditor claims would become more complex and controversial,» he explains. «Restarting Venezuela and managing an orderly restructuring of its external debt will not be a simple process; Although there are already proposals on the table, the risk of execution remains very high. «Our updated recovery price for PDVSA bonds is now around 35 cents on the dollar versus the 25 cents expected in early 2025,» Ratto continues.
Nor are they particularly concerned about China’s loss of investment in Venezuela. Chivakul points out that some entities could incur losses, but the Asian giant has reduced its exposure to Venezuela, which peaked in the early 2010s. «The most important thing is China’s investment in infrastructure and resources in other Latin American countries. We expect greater pressure from the United States to expel Chinese investment in strategic infrastructure (such as the port of Chancay in Peru) and critical resources (mines),» he points out. For example, Bolivia’s recent turn towards the United States after the October presidential elections, which has led it to reconsider the lithium extraction contracts it signed with Beijing. But Ratto doesn’t see it so clearly. Beyond the tensions that this will generate in Latin American markets, he also considers that the situation is risky for the US dollar and the US economy. And it is likely that the US will be increasingly perceived as a «nationalist and aggressive» country after its latest actions. And this directly affects the world’s leading economy. «The superior trajectory of US real GDP growth depends on continued external support for its twin deficits. This episode may become another blow to the privileged status of the US dollar and, ultimately, to the relative outperformance of the US economy, which is still unlikely, but no longer unthinkable. An additional incentive to further diversify the US economy,» he concludes.
