Since reaching its lowest point for 2019 in May (dropping to 89,000 base points), breaking new record-highs has become the norm for Ibovespa, Brazil’s benchmark stock index. Over the past two months, the index has risen 16 percent, fueled by investors’ optimism regarding the pension reform’s progress in Congress. But politics and financial markets work at a different pace. And that’s why, after months of euphoria, investors are already beginning to worry about the future—before the reform has even left the House.
The progress Brazilian markets have made so far is, ironically, one of the reasons for investors getting cold feet.