Brazil Selloff: Election Shock

General
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Lula’s re-election has triggered a sharp sell-off in Brazilian assets as investors unwind bets on a political shift. Pre-election rally: Brazilian stocks rose nearly 7%

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Post Election:

  • Brazilian real futures: −10%
  • Brazil ETF (EWZ): nearly −20% in overnight trading
  • Pre-election rally: Ibovespa gained ~7% after the first round
  • Brazil public debt: above 82% of GDP

Investors are concerned about government spending, rising debt and future interest rates. This looks like a sharp reaction to political expectations. The next big signal will be the government’s fiscal plan and its approach to debt.

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This is Braazilll!!!

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Fascists everywhere in Latin America. :face_exhaling:
But not in Brazil, 'twas a close call! :sweat_smile:

The Market will be fine (in time). :hourglass_not_done:

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Remember Nifty’s historic 400 plus seats election prediction on June 4th 2024 fell close to 5.93% .

Now Brazil is witnessing the same drama! Lula’s surprise win reportedly sent the EWZ ETF crashing nearly 20% after hours.
Markets really do go from “to the moon” to “where’s the exit?” in no time!