Utoo Radio with Other News Sources, June 1, 2024 - Mexico's newly elected president, Claudia Sheinbaum, faces a market meltdown and a difficult path to reconcile a deeply divided country.

Sheinbaum has promised to continue the political course set by her populist predecessor despite widespread discontent with persistent cartel violence, weakening democratic institutions, and fears among investors that an already hostile environment might become much worse.

The Mexican peso dropped over 4% in value, and the Mexican stock exchange took a dive to close off 6%.

Gabriela Siller, director of analysis at Banco Base, noted that Sheinbaum's victory, along with an apparent super-majority in Congress for her Morena party, raised fears that changes in the Constitution could deteriorate the risk balance of Mexico and cause capital to leave the country.

López Obrador appears determined to push through his highly divisive constitutional changes before he leaves office on Sept. 30. Sheinbaum appeared conscious of the need to heal divisions, but it was unclear how she might go about achieving it.

U.S. President Joe Biden congratulated Claudia Sheinbaum on her historic election as President-elect of Mexico, expressing his hope for continued collaboration and partnership.

However, the bilateral relationship has been complicated by Mexican President López Obrador's refusal to acknowledge the synthetic opioid fentanyl produced by Mexican cartels.

Mexico has been willing to prevent migrants from reaching the U.S. border, a valuable contribution for the Biden administration. It is unclear whether Mexico's anti-drug cooperation will improve under Sheinbaum.

López Obrador has pledged to allow Sheinbaum to govern without trying to rule from behind the scenes after he leaves office.

Sheinbaum, a climate scientist and former Mexico City mayor, has vowed to continue López Obrador's policies and to make her own mark on the presidency.

The elections were widely seen as a referendum on López Obrador, who has expanded social programs but largely failed to reduce cartel violence in Mexico. Sheinbaum stressed the long struggle it took for a woman to reach the presidency and emphasized the importance of working together to bring peace to the country.