The Biggest Stock and Bond Market Gains Happened in One Place Yesterday

It's not every day these two wildly dissimilar lightning bolts strike the same place--but you won't believe just where that place was!

It may be one of the biggest shocks of the trading day, but one of the biggest gainers in both stocks AND bonds worldwide happened in the same country yesterday--I'm talking about Argentina, and this is one example of risk working FOR investors.

The Argentine stock market index, the Merval, (MERV) saw just over seven percent gain while the Discount bond (due 2033) saw an eight percent hike in price terms, now yielding nearly thirteen and a half percent.

What drove that huge boost, you wonder? Seems that the same thing that did it for Japan, Singapore and Australia yesterday did it for Argentina today--the European Union's bailout package for Greece. This is big news for Argentina, who only recently defaulted on its own debt and was preparing an initiative to swap those defaulted bonds for fresh new bonds that actually have something backing them. And they're even thinking about going a step beyond that and issuing fully one billion dollars worth of NEW bonds on top of the eighteen billion in defaulted bond swaps.

So should you rush out and get you some sweet, sweet Argentine bonds? I'd personally say no--it wasn't anything Argentina had control over that bought them the rate hike, like good fundamentals or anything similar. Events very much out of their control, half a world away, drove that hike. So Argentina's value is still very sketchy. I wouldn't do much business in Argentine paper, if any at all.

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