Paint it Purple
How Milei's LLA became the most voted force nationwide and what it means going forward
Welcome Avatar! The unexpected purple wave of Milei’s LLA became a reality in yesterday’s midterm elections. This completely changes the ball game for the big reform initiatives that are scheduled for the upcoming weeks.
In a shocking result, La Libertad Avanza achieved a landslide victory nationwide, with 40.66%, and even won the province of Buenos Aires, the Peronist stronghold, where it lost by 13 points in the local elections on September 7, only little over a month ago. Now, LLA won there by one point, in an epic comeback.
President Javier Milei entered the stage last night with the goal of presenting a stern expression to the markets, which eagerly awaited the night’s results. He spoke to the Argentina of the day after the elections:
“Today has clearly been a historic day for Argentina. The Argentine people decided to leave behind one hundred years of decadence and persist on the path of freedom, progress, and growth. Today we passed the turning point; today begins the construction of a great Argentina.
This result is nothing more and nothing less than the confirmation of the mandate we assumed in 2023.
Today, the entire country, from La Quiaca to Ushuaia, confirmed its commitment to irreversibly change the destiny of the nation.
We will have the most reformist Congress in Argentine history.”
In the province of Buenos Aires, the most densely populated province and the battleground where Peronism hardly ever loses, La Libertad Avanza was able to convert a -14% difference in the local elections in September to +1% in the national midterms.
To put this into perspective, Alex Krüger provided a good comparison on X:
“Looking like Milei is winning the Midterms in Argentina, even taking over in the province of Buenos Aires.
That would be like Republicans winning California and New York, both.”
This is also why the local September elections had such a devastating impact on morale: losing by 14% in one of the most important provinces was a real blow, and mainstream media expected this to carry over to the national midterms.
Once again, they were wrong.
Despite these being the legislative elections with the lowest level of participation since the return of democracy, with only 67.8% of voters, the government managed to recover in some key districts against all the evidence of absenteeism recorded in the same places in the local elections in September.
However, in the Province of Buenos Aires, voter turnout grew from 61% less than two months ago to 68.2% this Sunday. Peronism lost votes from one round to the next.
Similarly, in the city of Buenos Aires, turnout increased from 53% to 69%, and in Santa Fe, from 52% to 63.3%. These are three of the five largest districts in terms of registered voters, along with Córdoba and Mendoza. The Libertarians won in all of them.
La Libertad Avanza’s growth compared to the 2023 general elections is greater than Macri’s between the 2015 general elections and the 2017 legislative elections. Macri’s election in 2017 was better, but Milei’s recovery in the Buenos Aires districts (City and Province) is the key in this election.
After the positive results for Milei, Argentine bonds climbed more than 20%, ADRs nearly 50%, and the S&P Merval index rose almost 20%.
This is the best single day market open in history for Argentine stocks, and it is a stark contrast with 2019, when it was clear the Kirchnerists would return to power:
US Treasury Secretary Scott Bessent’s bet on the Argentine peso turned out to be another masterclass in forex trading, with the peso appreciating over 10% against the dollar after Milei’s solid win.
It remains to be seen if this appreciation sticks, but so far the trade has been great, and it shows it wasn’t a bailout after all:
Below we will go over the main reasons why and how Milei was able to flip the odds in his favor, and what it means for the next two years of his term in terms of the legislative power this result brings.