Good morning! We’re covering the new mood from private banks towards investing in Brazil’s economy. Jair Bolsonaro’s new far-right party. And what’s going on at the Supreme Court. (This newsletter is for platinum subscribers only. Become one now!)
Big banks believing in Brazil
A group of big banks, including Credit Suisse, UBS, JPMorgan, Goldman Sachs, BTG Pactual, and ratings agency Moody’s all released reports yesterday recommending investors to go after Brazilian assets. The rationale is that, with emerging currencies losing power against the U.S. Dollar, stocks in such markets are too cheap to be ignored. It helps that, unlike neighboring countries, Brazil has not had to deal with violent street protests.
The reports were enough to push the Brazilian stock market index up 1 percent, despite uncertainties about the U.S.-China trade war.
Why it matters. With Brazil’s country risk at pre-crisis levels, this could be a step further in the path to regaining investment-grade status—a pre-requisite for some major foreign funds to invest here.
Banks see promising signs. October saw the creation of almost 71,000 net formal jobs in Brazil, thanks to the retail sector—which begins to boost its staff ahead of the holiday season. The average monthly salary for...