Seeking Alpha

Brazil continues slide; downgrades coming?

  • After a rough three year stretch, Brazilian stocks continue to have a tough time of it early in 2014, with the Bovespa off another 2.5% today and the EWZ is down 6% YTD. The real keeps sliding as well - down 10% vs. the dollar over the last 3 months.
  • Of imminent concern is slowing growth and a ballooning budget deficit forcing a ratings downgrade - with analysts at both S&P and Moody's suggesting this week one could come later this year. “We don’t have fixed limits…but if debt-to-GDP ratio gets closer to 65%,” Brazil could be ripe for a credit-rating cut, says Moody's Mauro Leos (it's above 60% now). S&P meanwhile suggests the cut in the country's BBB rating could come ahead of the October presidential election.
  • Related ETFs: EWZ, BRF, BZF, BRXX, EWZS, BRAQ, BRAZ, BZQ, BRAF, BRZU, UBR, FBZ, BRZS, DBBR
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Comments (1)
  • frank paxman
    , contributor
    Comments (780) | Send Message
     
    Amazing to watch money move around the globe, and right now the money is leaving emerging markets generally and Brazil specifically. Remember not too long ago Brazil was a market darling?
    9 Jan 2014, 09:52 PM Reply Like
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