• Fitch Solutions believe Argentina will secure a deal to renegotiate its external debt obligations over the near term.
• Even with a debt deal secured, it is expected that the government's strained relationship with its creditors and lack of a plan to restore economic stability will remain barriers to its market access.
• Additionally, Fitch expects the IMF will push the government to develop a macroeconomic plan before agreeing to any new concessions to assist the government.

(Source: Fitch Solutions)

• One of the world’s major credit-rating companies fired a warning shot regarding the U.S.’s worsening public finances, just as lawmakers in Washington contemplate spending more to combat the economic fallout from the coronavirus pandemic.
• Fitch Ratings revised its outlook on the country’s credit score to negative from stable, citing a “deterioration in the U.S. public finances and the absence of a credible fiscal consolidation plan.” The country’s ranking remains AAA.
• “High fiscal deficits and debt were already on a rising medium-term path even before the onset of the huge economic shock precipitated by the coronavirus,” Fitch said. “They have started to erode the traditional credit strengths of the U.S.”

 (Source: Bloomberg)

• Japan’s economy shrank an annualized 2.2% in January-March, unchanged after a second revision, data from the Cabinet Office showed on Monday. The additional revision for the gross domestic product (GDP) compared with economists’ median forecast for a 2.8% contraction in a Reuters poll.
• On a quarter-on-quarter basis, GDP shrank 0.6%, also unchanged from the second preliminary reading and compared with a median forecast for a 0.7% fall.
• The government published additional revisions to GDP for the January-March quarter reflecting revised capital spending data from the finance ministry, which had initially drawn fewer respondents than usual due to coronavirus-related disruptions.

 (Source: CNBC)

• For the three months ended June 30, 2020, Lasco Manufacturing Limited reported an unaudited net profit of $341.81Mn (EPS: 8¢), up by 21.0% (or $59.39Mn) when compared to the same period in the prior year.
• This performance was driven by a 3.4% (or $60.76Mn) increase in revenues, a 5.8% (or $19.26Mn) reduction in operating expenses, and a 49.3% (or $15.79Mn) decline in finance costs.
• Since the start of the year, the company’s stock price has fallen 19.4% to close trading at $3.78 on Wednesday, July 29, 2020. The stock currently trades at a P/E of 15.2x earnings, which is below the Junior Market Manufacturing Sector Average of 21.6x earnings.

(Source: LASM Financials)

• Lasco Distributors Limited reported an unaudited net profit of $258.02Mn (EPS: 7¢) for the three months ended June 30, 2020, which represents 57.4% (or $94.11Mn) increase relative to the corresponding period in 2019.
• This favorable outcome can be attributed to an 8.4% (or $366.23Mn) increase in revenue, a 38.9% (or $20.48Mn) increase in other operating income, and a 10.2% (or $73.79Mn) decline in operating expenses. These improvements countered the 9.6% (or $334.70) hike in the cost of goods sold.
• The stock price has fallen 3.1% since the start of the year, closing Wednesday’s trading session at $3.12. At this price, the stock trades at a P/E of 13.4x earnings, which is below the Junior Market Distribution Sector Average of 19.9x earnings.

(Source: LASD Financials)

• Fitch Solutions expects that the Mexican government’s recent pension reform proposal will be approved in the months ahead, increasing required employer contributions and reducing weeks of contributions of workers.
• While this proposal will increase the costs of employing formal workers, it has backing of the business community and is less radical than some had feared, which will support investor sentiment.
• The proposal is also a political victory for Mexican President Andrés Manuel López Obrador, though pressures stemming from Covid-19 and security issues will limit any boost in his political capital.

(Source: Fitch Solutions)

• Fitch Solutions has revised its 2020 real GDP growth forecast for Panama to -6.4% y-o-y, from -2.9% previously, to reflect the impact of Panama’s extended lockdown measures on economic activity.
• Extended shutdowns of major sectors of the Panamanian economy will contribute to a significant decline in private consumption over the coming months. Furthermore, fiscal stimulus measures will be insufficient to offset the COVID-19-induced fall in demand over the short term.
• The risks to Panama’s economic outlook are skewed heavily to the downside, as sustained Covid-19 lockdowns into Q4 2020 could delay a recovery in key sectors of the economy.

(Source: Fitch Solutions)

• The U.S. economy likely contracted at its steepest pace since the Great Depression in the second quarter as the COVID-19 pandemic destroyed consumer and business spending, potentially wiping out more than five years of growth.
• Gross domestic product probably collapsed at a 34.1% annualized rate last quarter, according to a Reuters survey of economists. That would be the deepest decline in output since the government started keeping records in 1947.
• The drop in GDP would be more than triple the previous all-time decline of 10% in the second quarter of 1958. On a non-annualized basis, GDP likely tumbled 10.6%. The economy contracted 5% in the first quarter.

(Source: Reuters)

• The United States’ trade deficit in goods fell sharply in June as exports rebounded following several months of decline, suggesting a recovery in global trade after being severely disrupted by the Covid-19 pandemic.
• The goods trade deficit dropped 6.1% to $70.6Bn last month. Exports of goods accelerated 13.9% to $102.3Bn, eclipsing a 4.8% increase in goods imports to $173.2Bn. Goods imports fell in May to their lowest level since July 2010.
• The rebound in exports was led by a 144.1% surge in shipments of motor vehicles and parts. Exports of capital goods soared 11.0% and consumer goods jumped 12.6%. There were also increases in exports of industrial supplies and other goods, but shipments of food, feeds and beverages fell.

(Source: CNBC)

• On July 27, 2020, the Statistical Institute of Jamaica (STATIN) reported that Jamaica’s imports from January to April 2020 were valued at US$1,680.6Mn, a 23.1% decline when compared to the US$2,186.7Mn spent for the same period in 2019.
• Also, Revenue from exports amounted to US$425.1Mn for the current review period, 24.1% lower than the US$560.3Mn earned in a similar period in 2019.
• Expenditure on imports from the United States of America (USA) - Jamaica’s main trading partner was valued at US$637.7Mn. This is 40.2% below the US$1,067.1Mn recorded for the period January to April 2019. Earnings from total exports to the USA amounted to US$215.8Mn, an increase of 6.7% when compared to the US$202.3Mn earned in 2019.

(Source: STATIN)