Sep. 5, 2013, 11:08 AM
- Brazil’s government confirmed this week it will hold an auction Oct. 21 to sell the huge Libra offshore oil field, estimated to hold 8B-12B barrels of recoverable crude oil, which would make it the largest deepwater oil field ever discovered - and possibly the most expensive project ever developed, with payback unlikely for more than a decade.
- The sale is expected to generate significant interest from the world's largest oil companies, but they likely would have to team with the bumbling Petrobras (PBR).
- Brazil may be a coming energy superpower, but previous high production expectations haven’t been fulfilled despite massive discoveries.
- ETFs: EWZ, BRF.
Sep. 3, 2013, 7:34 AM
- The Bovespa was yesterday's big winner, surging 3.7% following faster-than-expected weekend manufacturing data out of large customer China. VALE - whose top export market is China - gained 3% (the ADRs are +2.4% premarket).
- "Most of the risk for a China slowdown is already priced in," says fund manager Nick Robinson. "China will probably keep growing at a pace that's fast enough to support commodities prices."
- EWZ +1.4% premarket.
- Other Brazil ETFs: BRF, EWZS, BRAF, BRXX, UBR, BZQ, BRAZ, BRAQ, BRZS, BRZU, BZF.
Aug. 30, 2013, 8:25 AM
- Q2 GDP rose 1.5% from Q1 vs. expectations of 0.9%. For the full year GDP is ahead by 3.3% vs. 2.5% forecast.
- Brazil's central bank overnight hiked its benchmark lending rate 50 basis points to 9% (as expected). It's the 3rd consecutive increase and the policy statement left the door open for further moves as the bank combats rising inflation/slipping real (BZF). This GDP report will do nothing to dissuade that policy course.
- MSCI Brazil Index ETF (EWZ) +1.6% premarket.
- Other Brazil ETFs: EWZ, BRF, EWZS, BRAF, BRXX, UBR, BZQ, BRAZ, BRAQ, BRZS, BRZU.
Aug. 23, 2013, 4:46 AM
- Brazil's central bank will today embark a $60B program aimed at supporting the real (BZF), which has dropped 9.1% vs the dollar in this month alone.
- On Monday-Thursday, the bank will sell $500M worth of foreign-exchange swaps every day, while on Friday it will auction $1B of dollar loans.
- The program adds to swap and credit-line actions of $45B that the bank has already announced this year, not that they've done much good. The USD-BRL is up almost 26% since it hit a 2013 low of 1.9419 in March. It's now at 2.4428.
- ETFs - EWZ, BRF, EWZS, BRAF, BRXX, UBR, BZQ, BRAZ, BRAQ, BRZS, BRZU
Aug. 1, 2013, 9:33 AM
- July Manufacturing PMI fell to 48.5 from 50.4. It's the first time in contraction territory since September 2012 and the lowest read in 13 months.
- As growth slowed, inflation picked up with input prices rising to their highest level in 3 years. Respondents blamed the weaker real for leading to higher costs for imported raw materials.
- Brazil's central bank is currently in a rate-hiking cycle, having last raised rates 50 bps in July to 8.5%.
- The Bovespa has been about the worst-performing major stock market over the last few years, but began to pick its head up over the last month.
- EWZ +1.1% premarket. Other ETFs of interest: BRF, EWZS, BRAF, BRXX, UBR, BZQ, BRAZ, BRAQ, BRZU, BRZS.
Jul. 11, 2013, 7:19 AMBrazil's central bank hikes interest rates 50 bps to 8.5% - the third increase this cycle - and indicated it isn't finished tightening. Brazil is currently caught in a trap of sluggish growth and perky inflation, i.e., stagflation, and it's stock market has been about the worst-performing serious bourse this year. Things are looking good ahead of the open though, EWZ +3.4%. | Comment!
Jul. 10, 2013, 1:43 PMMorgan Stanley says China's GDP growth could decelerate to a 5% handle in 2014 if the proper policy response isn't crafted to deal with banking sector deleveraging, a prediction which pairs nicely with Capital Economics' discussion of who loses from a Chinese "rebalancing." Commodity producing emerging markets in Latin America, the Middle East, and Africa are flagged and Barron's has a list of ETFs which may or may not have priced in a China slowdown: EWZ, EPU, ECH, EWT, EWM, and, more generally, EEM. | 1 Comment
Jul. 5, 2013, 4:44 PM
Jul. 2, 2013, 3:20 PMBrazil's Bovespa tumbles another 3.8%, now back to 2009 levels, dragged down by a continued plunge in Elke Batista's OGX Petroleum (OGXPY.PK -24.8%). Not helping is today's report of a 2% decline in industrial production in May, about double the estimates. The good news is a drop in swap rates as traders place bets the central bank could stop hiking rates. The Brazil Index ETF (EWZ -3.6%), the Small Cap ETF (BRF -3.8%). | 2 Comments
Jun. 28, 2013, 2:10 PM
Jun. 27, 2013, 4:29 PMGundlach: If I was looking for a contrarian play, I'd buy emerging markets (EEM, DEM, VWO) over gold, he says, shaking his head at their massive underperformance compared to the S&P 500. Brazil (EWZ) and China (FXI, CAF) stand out for their weakness, but he'd stick to a basket rather than any individual market. | 1 Comment
Jun. 26, 2013, 10:40 AM43 out of 45 global markets are oversold, according to BAML's "Breadth Buy" indicator. These extreme signals tend to be followed by a short-term 6-7% bounce, but, cautions chief investment strategist Michael Hartnett, a sustained rally would require a shift in policy behavior. What's more, the 2 markets not in oversold territory are the U.S. (SPY) and Japan (EWJ, DXJ) and they're kind of important. Most oversold: Brazil (EWZ), Turkey (TUR), South Africa (EZA), Mexico (EWW), Materials (XLB), China (FXI, CAF). Least oversold (in addition to the U.S. and Japan): Health Care (XLV, IYH), and Consumer Discretionary (XLY). | Comment!
Jun. 24, 2013, 4:34 PMAfter weeks of mass protests, Brazilian President Rousseff calls for a referendum and Constituent Assembly to carry out political reform in the country. Off more than 20% this year, the Bovespa is the worst performer among major emerging markets. The carnage in Brazilian ADRs includes BBD, CZZ, FBR, GFA, ITUB, OIBR, PBR, VALE. Brazilian ETFs EWZ and BRF have fared little better. | Comment!
Jun. 24, 2013, 12:06 PMThe iShares Emerging Markets (ETF) (EEM -3.3%) continues its severe underperformance this year, about doubling the S&P's loss today as China plummeted 5.3% overnight and Brazil (EWZ -4%) sinks. A big outperformer from the lows of the financial crisis through early 2011, emerging markets have now given up all of those gains over the last 2-plus years. | Comment!
Jun. 21, 2013, 6:15 AMBrazilian President Dilma Rousseff has called an emergency cabinet meeting for today after two weeks of demonstrations yesterday culminated in over 1.25M people marching in more than 100 cities. The protesters are angry about a range of economic issues, including the huge sums spent on the Soccer World Cup next year, the rising cost of living and the poor quality of public services. Over the past five day, the real (BZF) has dropped 5.2% vs the dollar while the Bovespa is -4.6%. | Comment!
Jun. 20, 2013, 10:42 AMStocks continue to slide with the Dow (DIA -1.6%) at a session low and off 240 points just over an hour into the session. Among sectors, small caps (IWM -2.1%) are underperforming, as is energy (XLE -2.4%). WTI crude (USO -2.8%). In Europe, the Stoxx 50 is off 3.5%. Among emerging markets still open, Brazil is off 3%, but the Brazil ETFs (EWZ -4.7%), (BRF -6.4%) are faring even worse, their decline compounded by a 2% fall in the real (BZF). | 3 Comments
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The iShares MSCI Brazil Capped Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Brazil 25/50 Index (the “Underlying Index”).
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