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Economics & Strategy – Equity Strategy: Third

Pedro Martins Jr. returns in third place — but this year he oversees the J.P. Morgan team, having rejoined the firm from Bank of America Merrill Lynch in October.

Pedro Martins Jr.
& team
J.P. Morgan
First-place appearances: 3

Total appearances: 22

Team debut: 1993

Pedro Martins Jr. returns in third place — but this year he oversees the J.P. Morgan team, having rejoined the firm from Bank of America Merrill Lynch in October. (J.P. Morgan captured second place in 2012.) This group has ranked on the Latin America Research Team more often than any other — 22 times in 21 years — but a word of explanation is in order: This total includes the 11 appearances that the Bear, Stearns & Co. crew racked up before that firm’s acquisition by JPMorgan Chase & Co. in 2008. In 1995 and from 2002 through 2005, both entities ranked; in 1997, 1998, 2000 and 2008, neither did. Regional markets are in a period of transition, the São Paulo–based leader observes. “The cost of money is moving higher after more than 1,600 days of low rates and multiple quantitative easing programs in the Group of Three,” he says. “The fear of QE tapering has caused a sell-off in Latin American equities, dialing up volatility in bonds and foreign exchange weakness in the region.” Against this backdrop, the team recommends overweighting Mexico, in anticipation of economic growth upside from President Enrique Peña Nieto’s structural reform agenda and appreciation of the domestic currency against the dollar through the end of 2014, among other factors. The strategists earn praise for their “deep experience and solid fundamental views,” in the words of one investor. — Carolyn Koo


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