Pair the look down with The Row’s slip-on trainers. The off-the-shoulder silhouette is perfect for the Loukanikos dog shirt Besides current weather when the summer sun still lingers. Check back on Halloween.Everyone needs a go-to black dress in their arsenal for dressed-up moments, and this one from Gabriela Hearst could be yours. The long-dreaded election could be headed for a “Goldilocks” result, with political power in the center and a peaceful transition of power. 2 economy, and is “definitely looking to add to Brazil.”įor all those qualifications, Brazil is on a roll few anticipated when 2022 started. He believes in a brighter 2023 for the No. “Recovery in China is a good 30% to 50% of the buy case for Brazil,” says Martin Schulz, head of the international equity group at The most likely point of agreement between Lula and Bolsonaro-influenced legislators would be “measures that put money in the pockets of the population,” Larose adds – not great news for a country where a debt-to-gross domestic product ratio around 90% already haunts credit and currency markets.īrazil also remains highly vulnerable to the cloudy outlook in China, its top export customer. “Longer-term you’re at risk of a four-year lame-duck government,” Vontobel’s Larose says. The flip side of a right-tilting Congress checking Lula is the prospect of stalemate on pressing longer-term reforms: to the burdensome-yet-ineffectual tax system, sclerotic state bureaucracy, or widespread indexation that locks in an inflationary bias. “We are constructive on Brazil vis-à-vis EM equities 12-18 months out,” Czerwonko concludes.īeyond that, Brazil could go back to being Brazil. Before Monday’s bump, the index traded at an average price/earnings ratio around 6. And after severe postpandemic underperformance, it’s still cheap. (BBD)-all decent hedges against inflation and high interest rates. “This country is teaching the rest of the world how to carry out monetary policy in an inflationary environment,” says Alejo Czerwonko, chief investment officer for emerging markets Americas at UBS Global Wealth Management.īrazil’s stock market is structurally well positioned for the current global turmoil, Czerwonko adds. It has been way out in front of the global inflation curve, hiking rates from 2% to 13.75%, and could start cutting in the first half of next year, markets anticipate. With politics reverting toward more-or-less usual for a contentious democracy of 215 million, investors are focused on Brazil’s economic momentum. Growth is accelerating toward 3% this year, inflation and unemployment are both falling, while most of the world moves in the opposite direction. Brazilians can largely thank their central bank, whose independence was cemented into law under Bolsonaro. “I don’t think he is angry at all,” Larose speculates.īolsonaro indeed steered clear of stop-the-steal rhetoric post-first round, trawling for votes by more conventional means: moving up the pay date for a supplementary income subsidy he lately instituted. Instead, Bolsonaro can morph into a legitimate opposition leader and wait till next time. That decreases the chances that the current president will throw over the political apple cart and cling to power even if he loses, Larose thinks. It would need two-thirds approval in both houses of Congress.īolsonaro’s Liberal Party, or PL, had a big night, emerging as the single biggest bloc in both the Chamber of Deputies and the Senate (both of which remain highly fractured). Investors take particular comfort that removing Brazil’s constitutionally-imposed fiscal spending cap now looks firmly out of Lula’s reach. “We were very surprised by the legislative elections,” says Thierry Larose, portfolio manager for emerging markets local debt at More importantly, right-leaning parties made significant gains in Congress, where they can effectively check Lula. “We need to talk to all the people who didn’t vote for us in the first round,” Lula said, emerging from a day-after huddle with his campaign brain trust. But he quickly started pivoting to the center. 30 run-off, with 48.4% of the first-round tally to Bolsonaro’s 43.2%. Lula, as the 76 year-old left-leaning former president is known, will likely still win the Oct.
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