blog

Latest from the Quantamize Blog

Brazil's Bolsanaro: From Promising Start to Crash & Burn in Record Time

May 24, 2019

We Crunch the Numbers, You Make the Trade.We Crunch the Numbers, You Make the Trade.
We Crunch the Numbers, You Make the Trade.We Crunch the Numbers, You Make the Trade.

 

  • Brazil's Jair Bolsanaro was elected with great fanfare promising reform and to lift Brazil out of its economic malaise while ending the endemic corruption
  • His right-of-center government, headed by president most would say lacks charisma, assumed power with optimism in full supply
  • Key to Boslanaro's victory was a strong, conserative social media establishment that endlessly promoted his canidacy and adminstration; many times being led by his 3 sons

 

brazil flag

  • In Bolsanaro's first five months in office, the bloggers and online commentators who supported him have grown louder 
  • As Bolsanaro's mandate got under way, the challenges and setbacks began, and that same social media establishment turned its fire on members of Bolsanaro's own adminstration
  • A third of Bolsanaro's cabinet are retired generals from the military, the more moderate members of his cabinet, and often receive the brunt of the online criticism
  • These members of this cabinet are said to have give Bolsanaro an ultimatum: silence the online mob or else
  • Since then, the blogosphere has quieted somewhat, but the turmoil overall remains

 

iShares MSCI Brazil ETF (EWZ) - 1 Year 

EWZ

Source: Bloomberg

 

  • Bolsanaro's approvval rating recently turned negative and markets have made their disapproval clear
  • Brazil currency, the real, recently hit an 8-month low
  • The Brazilian stock market has drifted lower after its run-up tp his election (see graph above)
  • Opposition politicians have even started throwing around the impeachment word, with many saying they would prefer to work with his VP
  • Bolsanaro, at this point, does not seem to have a clear path to get out of his present situation

 

 

 

 

Global Top Stock IdeasTOP LONG & TOP SHORT STOCK IDEAS FOR GLOBAL MARKETSMONTHLY TOP IDEAS FROM OUR MULTI-FACTOR QUANTITATIVE MODELS
Global Top Stock IdeasTOP LONG & TOP SHORT STOCK IDEAS FOR GLOBAL MARKETSMONTHLY TOP IDEAS FROM OUR MULTI-FACTOR QUANTITATIVE MODELS