Wall Street Trims Argentina Exposure as Milei's Approval Slides Further

Argentine stocks and bonds diverged from a broadly positive emerging-markets tape as investors adopted a 'risk off' stance toward the country. The dollar-denominated Merval index fell to around 1,865 from earlier-year peaks near 2,200, financial-sector shares dropped 15–20% in dollar terms over 30 days, and country risk rebounded to roughly 470 basis points after briefly touching 400 in mid-July. Analysts linked the pullback to eroding political support: presidential approval was measured at 35% (Universidad de San Andrés) and 31.4% (Zentrix/MOP, fieldwork July 21–30), with disapproval near 58–63% across polls. Political analyst Sergio Berensztein said that 'with current approval levels, Milei doesn't guarantee a first-round victory' in 2027, cutting his estimated reelection odds from over 70% at the start of the year to below 50%. The government responded by relaxing dollar-lending restrictions to unlock roughly $6B in new financing and floating the use of FGS pension-fund deposits to stimulate mortgage credit.