Canadian Bank CEOs Defend Investments In Oil And Gas

Economic

Commodity

Summary:

'We are not getting off fossil-based fuels immediately,' RBC CEO tells committee.

The chief executives from Canada's five biggest banks faced hard questions from MPs on Thursday over their climate commitments and plans to help spur transition to renewable energy.

Representatives from RBC, CIBC, TD Bank Group, BMO Financial Group and Scotiabank appeared Thursday before the standing committee on environment and sustainable development. All five attended by video conference, avoiding an in-person hearing.

NDP MP Matthew Green took aim at David McKay, the head of RBC, the country's largest bank, for "touting" his climate record, while "continuing to be one of the largest financiers of fossil fuels in the world."

"This is a transition," McKay said in response.

"It's a complex transition. We are not getting off fossil-based fuels immediately. To just stop is not an option for us. We have to commit to finding green sources of energy."

Canadian banks have been criticized for how slow that transition has been, given that they remain among the largest financiers of oil, gas and coal globally. Canadian Bank CEOs Defend Investments In Oil And Gas_1

Canadian Bank CEOs Defend Investments In Oil And Gas_1

A recent report calculated that Canada's top banks pumped a combined $103.85 billion US into fossil fuel projects in 2023.

The five largest banks have made both short- and long-term emissions reduction targets, including net-zero financed emissions by 2050, but faced questions about whether those are on track.

Another recent report, from InfluenceMap, a global climate policy watchdog, found that Canada's largest five banks have not aligned "their short- and medium-term emissions reduction targets with their long-term net zero commitments."

Banks stress importance of oil and gas

None of the executives committed to limiting investments in the oil and gas sector to projects that would reduce emissions, and several stressed the importance of the sector.

"Energy has been very important to the economy and will continue to be important to the economy," McKay said.

At one point, Brandon Leslie, a Conservative MP, focused on how banks have made investments in renewable energy without being forced by government.

He then asked Scott Thomson, the CEO of Scotiabank, if an oil and gas project should be held to a different standard — other than whether a loan can be paid back.

(A bill proposed by Quebec senator Rosa Galvez could make it harder for oil and gas projects to secure financing.)

"I don't think energy projects should be held to a different standard than that," Thomson said.

Thomson later added that Canada can be a "leader in the energy transition," but suggested oil and gas can continue to play a role in the coming years.

"We should move away from emissions reductions at all costs to a comprehensive strategy that encompasses all sources of energy," he said.

Banks accused of 'fickle' commitments

Thursday's testimony comes a week after the same committee questioned the CEOs of Canada's top oil and gas producers. The committee is exploring how Canada can meet its commitment to reduce emissions.

Julie Segal, a climate finance specialist with the advocacy group Environmental Defence, said Thursday the banks' "voluntary climate commitments have proven fickle" and more regulations are sorely needed.

"We need credible climate transition transition plans from these banks and financial institutions, and since they are not designing these on their own we need rules to ensure they happen and are delivered."

Galvez's proposed bill, known as the Climate-Aligned Finance Act, that would impose new rules on Canadian financial institutions to make sure they are aligned with the country's climate goal.

The bill was tabled more than two years ago, but it remains at the committee stage in the Senate. It faces several more hurdles before it would be put to a vote in the Senate, and then make its way to the House of Commons.

The Canadian Bankers Association, which represents the country's largest banks, is opposed to the legislation, saying it would add unnecessary regulations on the sector.

Source:CBC

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

Thomas

Political

In the first-rate Stendhal novel that we call Emmanuel Macron's life, the protagonist grows bolder and bolder as he rises through France. He marries who he likes, thanks. He joins Rothschild even as a banking crash turns public opinion against financiers. He sets up a party, gives it his own initials and wins the biggest directly elected office in Europe after jilting his mentor.

His latest decision - to give the hard right an early shot at power - will be filed alongside those headstrong acts. It is no such thing. It is a work of cool logic.

The last best hope against populism in Europe is to expose it to government. The pressure of office might force anti-establishment parties to moderate, as Prime Minister Giorgia Meloni has done somewhat in Italy. Or it might reveal their incompetence and turpitude, as happened to former prime minister Boris Johnson in Britain.

Sometimes, of course, it will do neither: Power will neither tame nor shame. (See Hungary's Viktor Orban.) But even then, these parties should at least become subject to the pendulum of politics. Time spent in government is time spent alienating voters with tangible decisions.

Right now, in much of Europe, populists have a goldilocks level of success: Enough to foul the atmosphere, to spread the idea that simple answers to big problems exist if governments would but enact them, but not enough to have to prove this in office. The establishment has a record, and all records are flawed. Its enemies get to travel lighter. The contest between the two sides is, in Pentagon argot, asymmetric.

The Burden of Making Decisions

Note how many of the hard right's relative underperformers in the European parliament elections are incumbents at home (Orban's Fidesz party) or proppers-up of governments (the Sweden Democrats).

This is the gravitational force that drags mainstream politicians down. Government brings round-the-clock attention, not just the curated broadcast rounds at which British right-winger Nigel Farage excels. Above all, it brings the burden of making decisions that cost voters money.

I could cite tax rises here, to fund lavish promises. Or higher interest rates from overborrowing. But few things would harm the populist cause more than having to manage immigration.

Their plausible-sounding alternative to foreign labour in low-wage sectors - pay domestic workers more - would be tested against the public's price-sensitivity. Even if voters don't balk at higher social care or retail costs, the trade-off would become apparent at last.

Never having to be tested, populist ideas have a spurious credibility. Only a spell in government would change that.

What can be said against all this? "Donald Trump", perhaps. High office didn't temper the 45th United States president, did show voters his worst, and still he is favourite to be the 47th.

All true. But Europe, for now, is different. Most of its democracies aren't quite as divided or tribal as the US, where, eventually, the question of what day of the week it is will generate a 50-50 polling result. Gross misgovernment would still discredit a leader in most of the continent. Consider the irrelevance of Johnson in the UK election, even as a loudmouth on the sidelines.

Argument Versus Practical Demonstration

A better argument is that, once in office, populists might pervert the system to remain there, or do something so harmful as to outweigh the benefit of rendering them unelectable thereafter. (Such as leaving the world's biggest single market.) Hence the cordon sanitaire of the German mainstream against the hard right.

It is an argument to be reckoned with. In an ideal world, getting close to power would be enough for populists to lose voters.

Macron wants France to contemplate a Rassemblement National (RN) prime minister this summer, and demur. But he wouldn't have taken the decision to hold an election if he saw nothing constructive at all in an RN win. At some point, voters have to live with the consequences of their stated desires.

A notion dear to the West is that progress is made, and the truth arrived at, through argument. (Socrates has a lot to answer for.) This underestimates the role of practical demonstration.

The West didn't experience a human lifetime of moderate politics after 1945 because it was talked into it. What counted was the folk memory, now almost extinct, of what happened when nations last voted for parties that defined themselves against the system.

There might be no safe way of giving voters a controlled dose. But the status quo, in which populists are on television, on stage, but not on the hook for much, isn't tenable.

Macron's election will be framed as another outrageous gamble. It might in fact be the most prudent thing he could have done.

Source: Financial Times

Risk Warnings and Disclaimers

Add to Favorites

Cohen

Economic

Stocks

Investors are betting that the Federal Reserve is likely to implement the first of two rate cuts this fall, even as the central bank has stressed that it's not ready to declare victory in the war against inflation.

The Fed kept its benchmark lending rate at between 5.25% and 5.5%, the highest in more than two decades, following a two-day meeting in Washington. The parley was highlighted by a benign inflation report that showed price pressures in the world's biggest economy eased during May.

Fed Chairman Jerome Powell told reporters in his post-decision news conference that while all the Fed officials who submitted new growth and inflation projections for the June meeting, "most" were unmoved by data showing the slowest monthly price increase in four years and the lowest core reading since 2021.

The Fed's Summary of Economic Projections, which distill those forecasts into what's known as the dot plots, point to only one rate cut this year, compared with the three cuts forecast in March. Officials see modestly faster inflation pressures over the back half of the year.

"We have stated that we do not expect it will be appropriate to reduce the target range for the Federal Funds Rate until we have gained greater confidence that inflation is moving sustainably toward 2%," the central bank's inflation target, Powell told reporters in Washington on June 13. "So far this year, the data have not given us that greater confidence."

Fed's Powell needs 'more good data' before cutting rates

"The most recent inflation readings have been more favorable than earlier in the year, however, and there has been modest further progress toward our inflation objective," he added. "We will need to see more good data to bolster our confidence that inflation is moving sustainably toward 2%."

A corresponding slide in producer prices, which ultimately feeds into the Fed's preferred PCE Price Index inflation gauge, may have assuaged some Fed officials. Core prices remained flat in May while the headline reading actually declined 0.2%.

Ian Shepherdson of Pantheon Macroeconomics suggests that the Producer Price Index data, along with the softer May CPI print, could deliver a core PCE reading of 0.1%, well south of the 0.32% average recorded over the first four months of the year.

"Meanwhile, the outlook for slower rent gains, falling wage inflation, and margin compression at retailers suggests that the core PCE deflator will continue to rise more slowly than the Fed predicted this week, laying the foundations for the first rate cut to come in September and multiple easings this year," he added.

Cracks in the job market

The Labor Department's report on weekly jobless claims seems to confirm at least some of that thesis. The latest update showed 242,000 Americans filed for unemployment benefits in the period through June 8, an increase of 13,000 from the prior period and the highest overall tally since August of last year.

Rate traders, who saw their bets on a September cut whipsaw last week after a stronger-than-expected May employment report, revived their hopes of an autumn rate reduction following Thursday's dataset.

CME Group's FedWatch now suggests a 67.7% chance of a quarter-point rate cut in September, with similar odds for a follow-on move in December.

“Jobless claims are showing cracks in the job market as inflation cools and the Fed has stayed hawkish, but they have to be careful of fighting the last war," said David Russell, global head of market strategy at TradeStation.

"The dovish case is building. Policymakers were behind the curve fighting inflation in 2021," he added. "We have to hope they won’t repeat the same mistake, but in the opposite direction, in 2024.”

That once again puts markets squarely at odds with the Fed's June forecast. And that in turn sets up another "don't fight the Fed' conundrum heading into the summer on the back of records for the S&P 500 and Nasdaq stock indexes and multi-month lows for benchmark Treasury bond yields.

Keep up the Fed fight?

"Every data point that falls into the 'easing inflation' bin increases the odds of a rate cut before the end of the year," said Chris Larkin, managing director for trading and investing at E-Trade From Morgan Stanley.

"But as we’ve seen, the Fed isn’t inclined to read too much into one month’s numbers," he added. "In the meantime, the question is whether the stock market can maintain its momentum if it starts to expect more data like this."

Chris Zaccarelli, chief investment officer for Independent Advisor Alliance in Charlotte, says the main impact the Fed can have on markets now is a surprise change of signaling from rate cuts to rate hikes — "and they show no signs to do this."

"Ultimately, the stock market is uninhibited by a pause (and will continue looking forward to cuts). And this morning’s data further strengthens the case that the Fed’s next move will be a cut (either in late 2024 or early 2025). So we expect the market to continue making records in the near future," he added.

The S&P 500 in fact is up more than 13% this year, with a 3.2% gain for the second quarter. The index hit an all-time closing high of 5,420.63 points on June 13.

Should the Fed opt to cut rates in September, as market bets suggest, it would mark the end of the longest gap on record — 420 days — between the most recent Fed rate hike and the first rate reduction.

Jeff Buchbinder, chief equity strategist at LPL Financial, notes that the average S&P 500 gain during a Fed pause is 6%, citing data collected over the past five decades.

Longer pauses, however, have produced better results: Buchbinder says the average gain over the past six policy gaps, going back to 1989, has been slightly more than 13%.

The broadest benchmark of U.S. blue-chip shares has gained more than 13.5% since the Fed hiked rates on July 26 of last year, while the tech-heavy Nasdaq has gained 24.8%.

Clark Bellin, president and chief investment officer at Bellwether Wealth in Lincoln, Neb., sees more gains ahead "as the market starts to price in a world of disinflation and continued corporate earnings growth.

"The stock market is forward-looking, and even though inflation is still elevated, it's looking ahead to a time when inflation is lower," he added.

Source：TheStreet

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Glendon

Economic

Zillow Group (ZG), the online real estate giant, has seen its stock price plummet in recent years. This article delves into the key factors that have contributed to this decline, offering insights for investors to understand the present and future of Zillow stock.

The IBuyer Fiasco: A Short-Lived Gamble

In 2019, Zillow embarked on an ambitious plan to become a major player in the iBuyer market. This involved directly purchasing homes, renovating them, and then reselling them. However, the venture proved disastrous. Zillow underestimated the complexities of home valuations, repairs, and market fluctuations. The company faced significant losses and ultimately exited the iBuyer market in 2021, taking a major financial hit and damaging investor confidence.

Shifting Revenue Streams: From Listings to Mortgages and Rentals

Following the iBuyer debacle, Zillow has shifted its focus towards other revenue streams. Their core business remains online real estate listings, generating income through advertising and lead generation for real estate agents. However, Zillow is also trying to expand into new areas like mortgages and rentals. These initiatives are still in their early stages, and their success in generating significant revenue is uncertain.

The Legal Landscape: A Potential Headwind

A recent court ruling and a legal case against the National Association of Realtors (NAR) have cast a shadow over Zillow's core business model. The case challenged the traditional practice of home sellers paying realtor commissions for buyers. While Zillow itself isn't directly impacted, a potential shift in commission structures could lead to lower demand for Zillow's advertising services from real estate agents, impacting their revenue stream.

The Competitive Threat: A Crowded Marketplace

The online real estate market is becoming increasingly competitive. Established players like Realtor.com and Redfin, along with innovative startups, are vying for market share. Zillow needs to maintain its technological edge and user experience to stand out in this crowded landscape.

Growth Concerns: A Hurdle for Investors

Zillow is not yet consistently profitable. While the company boasts a large user base, translating that into sustainable and significant revenue growth remains a challenge. Investors are wary of the company's future prospects without a clear path to consistent profitability.

Looking Ahead: Can Zillow Recover?

Zillow's future trajectory remains uncertain. Here are some factors to consider:

Success of New Ventures: The success of Zillow's expansion into mortgages and rentals will be crucial for future revenue growth.Resolution of Legal Challenges: The outcome of the legal battle surrounding realtor commissions could significantly impact Zillow's core business model.Innovation and Differentiation: Zillow needs to continuously innovate and differentiate its platform to maintain its competitive edge in the crowded online real estate market.Investing in Zillow: A Calculated Risk

Zillow stock might present an opportunity for risk-tolerant investors who believe the company can overcome its challenges and achieve sustainable growth. However, careful consideration of the factors mentioned above is crucial before making any investment decisions.

Conclusion: Zillow's Stock Decline - A Learning Experience

Zillow's stock price decline serves as a valuable learning experience for investors. It highlights the importance of thorough research, understanding a company's business model and potential risks, and carefully evaluating future growth prospects before investing.

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Glendon

Economic

CrowdStrike Holdings, Inc. (NASDAQ: CRWD) has emerged as a prominent player in the cybersecurity industry, offering cutting-edge solutions to protect organizations from ever-evolving cyber threats. As investors seek opportunities in the rapidly growing cybersecurity market, CrowdStrike's stock has garnered significant attention. In this comprehensive review, we will delve into the company's business model, financial performance, competitive landscape, and growth prospects, providing a holistic assessment of CrowdStrike as an investment opportunity.

Business Overview

CrowdStrike is a pioneer in the field of cloud-delivered endpoint protection, offering a comprehensive platform called the Falcon Platform. This platform provides a wide range of cybersecurity solutions, including endpoint security, cloud workload protection, identity protection, data protection, and threat intelligence.

The company's innovative approach to cybersecurity leverages the power of cloud computing and artificial intelligence (AI) to deliver real-time protection and threat detection. CrowdStrike's lightweight agent technology enables seamless deployment across various endpoints, including desktops, servers, and mobile devices, ensuring comprehensive coverage for its clients.

Financial Performance and Growth Trajectory

CrowdStrike has demonstrated remarkable financial performance, driven by strong demand for its cybersecurity solutions. In its most recent fiscal year, the company reported revenue of $1.72 billion, representing a year-over-year growth of 53%. This impressive growth is a testament to the increasing adoption of CrowdStrike's products and the company's ability to capitalize on the growing cybersecurity market.

The company's subscription-based revenue model, which accounts for a significant portion of its total revenue, provides a recurring and predictable revenue stream, enhancing its financial stability and enabling long-term growth projections.

CrowdStrike's strong financial performance has been accompanied by robust profitability metrics. The company's gross margins have consistently remained above 70%, reflecting the scalability of its cloud-based solutions and efficient operational model.

Competitive Landscape and Market Position

The cybersecurity market is highly competitive, with established players and emerging startups vying for market share. However, CrowdStrike has carved out a unique position by offering a comprehensive, cloud-native platform that addresses a wide range of cybersecurity needs.

CrowdStrike's Falcon Platform has gained significant traction among enterprises, government agencies, and organizations of all sizes, enabling the company to capture a substantial market share in the endpoint security and cloud workload protection segments.

The company's strong brand recognition, continuous innovation, and strategic partnerships with industry leaders such as Amazon Web Services (AWS) and Google Cloud Platform (GCP) have further solidified its position in the market.

Strengths of CrowdStrike

Leading-Edge Technology: CrowdStrike's cloud-native architecture and AI-powered security solutions are considered best-in-class. Their focus on real-time threat prevention positions them well in the ever-evolving cybersecurity landscape.

Strong Customer Base: CrowdStrike boasts an impressive roster of clients, including Fortune 500 companies and government agencies. This strong customer base indicates the trust and value they deliver.

Recurring Revenue Model: CrowdStrike's subscription-based model generates recurring revenue, providing predictability and stability for future growth.

High Growth Potential: The cybersecurity market is expected to experience significant growth in the coming years, and CrowdStrike is well-positioned to capitalize on this trend.

Weaknesses of CrowdStrike

Valuation: CrowdStrike currently trades at a high valuation compared to its earnings. This could make the stock susceptible to a correction if the company doesn't meet aggressive growth expectations.

Competition: The cybersecurity space is becoming increasingly competitive, with established players and emerging startups vying for market share. CrowdStrike needs to maintain its technological edge to stay ahead of the curve.

Limited Profitability: While growing rapidly, CrowdStrike is not yet consistently profitable. Investors should consider their risk tolerance when evaluating the stock.

Growth Opportunities and Catalysts

CrowdStrike's growth prospects are supported by several key catalysts and opportunities:

Increasing Cyber Threats: As cyber threats continue to evolve and become more sophisticated, the demand for advanced cybersecurity solutions is expected to rise, driving growth for CrowdStrike's offerings.

Cloud Adoption: The accelerating adoption of cloud computing and the shift towards remote work have amplified the need for robust cloud security solutions, playing into CrowdStrike's strengths.

Expansion into Adjacent Markets: CrowdStrike has been actively expanding its product portfolio to address adjacent markets, such as identity protection, data protection, and security orchestration and automation, broadening its total addressable market.

International Expansion: While CrowdStrike has a strong presence in the United States, the company is actively pursuing international expansion opportunities, tapping into the global demand for cybersecurity solutions.

Strategic Acquisitions: CrowdStrike has demonstrated a willingness to acquire complementary technologies and companies to enhance its product offerings and accelerate growth.

Risks and Considerations

While CrowdStrike presents an attractive investment opportunity, it is essential to consider potential risks and challenges:

Competition: The cybersecurity market is highly competitive, and CrowdStrike faces intense competition from established players and emerging startups, which could impact its market share and pricing power.

Cybersecurity Landscape Evolution: The cybersecurity landscape is constantly evolving, and CrowdStrike must continuously innovate and adapt its solutions to stay ahead of emerging threats and maintain its competitive edge.

Valuation Concerns: CrowdStrike's stock trades at a premium valuation, reflecting high growth expectations. Any deviation from these expectations could lead to significant volatility in the stock price.

Regulatory and Compliance Risks: As a provider of cybersecurity solutions, CrowdStrike operates in a highly regulated environment, and any changes in regulations or compliance requirements could impact its operations and financial performance.

Conclusion

CrowdStrike has established itself as a leading player in the cybersecurity industry, offering innovative and comprehensive solutions to protect organizations from cyber threats. The company's strong financial performance, robust growth prospects, and strategic positioning in the cloud security market make it an attractive investment opportunity.

However, investors should carefully consider the potential risks and challenges associated with the cybersecurity landscape, competition, and valuation concerns. Conducting thorough due diligence and maintaining a diversified portfolio are essential when investing in CrowdStrike or any other stock.

Ultimately, CrowdStrike's ability to continue delivering cutting-edge solutions, expanding its market reach, and capitalizing on emerging opportunities will determine its long-term success and potential for generating sustainable returns for investors.

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Warren Takunda

Cryptocurrency

Bitcoin faces new lower BTC price targets after dropping as much as 8% over the last seven days. How Low Can the Bitcoin Price Go?_1

BTC/USD daily chart. Source: Binance

Traders and analysts are debating whether the market may drop further — and how low it can go.

Could Bitcoin price drop to $63,000?

After a failed attempt to climb above $70,000 on June 12, the BTC has retraced toward the $66,000 demand zone.

At the time of publication, the price of the leadingcryptocurrency was exchanging hands at $66,842, down 4% over the last 24 hours, according to data from CoinMarketCap.

Popular analyst Mark Cullen utilized the Elliott Wave method to demonstrate that a final down move could come imminently, taking Bitcoin to around $63,000.

“Bitcoin is sweeping the weekend highs and then continuing with the downside move,” Cullen said in a June 11 post on X, adding that “there is still more to go.”

“Bitcoin hits the first target red box. The question now is how the CPI and FOMC impact price?” How Low Can the Bitcoin Price Go?_2

BTC/USD chart. Source: Mark Cullen

Fellow analyst Matthew Hyland noted that BTC/USD was trading above a key support level at $67,000, which appeared to be the first line of defense before the price prints lower lows.

Sharing a chart in an X post, Hyland explained that the price is consolidation on longer timeframes, which “favors a continuation” of the uptrend. However, if the price drops below the said level, the analyst sets a lower target for BTC around the $64,700 level.

The $63,000 to $65,000 demand zone would put BTC price action at its lowest since mid-May and could represent one of the largest drawdowns from the current all-time highs of around 15%.

Bitcoin price loses key moving average

Continuing, MN Capital founder Micheal van de Poppe examined BTC’s price action on the daily timeframe for insights into the nature of support the coin enjoyed on the downside.

Uploading a chart to X, van de Poppe noted that BTC/USD had lost the support of its 50-day exponential moving average (EMA), which is currently at $67,011.

He further explained that the price still held “a crucial level of support” above $66,000, where the 100-day EMA currently sits.

A closer look at the daily chart below shows that BTC also lost this support during today’s drawdown, increasing the odds of deeper drops.

BTC/USD daily chart. Source: Binance

The 200-day EMA at $64,000 now presents the last line of defense for BTC and could be where the downside could be capped in the short term.

The downward trend displayed by the relative strength (RSI) and the price strength at 44 suggested that the market conditions favored the downside.

Interestingly, data from Coinglass shows significant liquidity building up between $63,000 and $65,500 over the last 30 days

Bitcoin liquidation heatmap. Source: Coinglass

Source: Cointelegraph

Risk Warnings and Disclaimers

Add to Favorites

Samantha Luan

Economic

The Senate win was a major boost for Milei, who won a shock election last year pledging to overhaul the embattled South American country's economy. He wants to privatize public firms, strengthen executive powers and boost incentives for investment.

"Without a doubt it was the best day economically for the government," said Argentine analyst Christian Buteler, citing the approval of the bill, a twin fiscal package also being green-lit and the extension until 2026 of a currency swap line with China.

A currency swap line is a loan agreement between central banks that gives the receiving country access to an agreed amount of funds in foreign currency such as dollars, Chinese yuan or euros.

"The approval of the laws in the Senate, beyond the tightness of the votes or the changes made, underscores the government's ability to govern despite coming into power with a (legislative) minority. That is very positive," he said.

Sovereign bonds in the local over-the-counter market were up an average 2.4%, a sovereign risk index fell sharply, while the black market peso strengthened over 3% to 1,245 per dollar after hitting a record low in the past week.

The local S&P Merval stock index seesawed throughout the day, but ended up 2.4% after a bout of profit taking.

The narrow overnight Senate wins came as protesters set fires and clashed with police in the streets outside Congress, with some citizens fearing it would leave them further exposed to rising unemployment and consumer prices.

Thys Louw, portfolio manager at asset manager Ninety One, said the bill's passage was the first step in a "very tight, very noisy, very long process" ahead.

"It wasn't perfect, but I do think it was a step forward in views around governance and for the ability to govern," he said.

Even so, Argentina is far from out of the woods, analysts cautioned. The lower house still needs to approve individual measures before Milei can officially pass his first law.

"We could see a sustained rebound in the Merval (main stock index) if Mr. Milei's objectives are met and lead to a decline in country risk and a recovery in sovereign bonds," said Andres Abadia, chief Latam economist at Pantheon Macroeconomics. "For now, though, uncertainty remains elevated, so caution is warranted."