Suddenly Another Global Name Is Moving


Attention has focused heavily on China, Italy and NAFTA. But suddenly today another part of the world is in play.

The iShares Brazil ETF (EWZ) rallied 6 percent today and has gained 8 percent in the last week. That places it well ahead of the S&P 500 and other emerging markets over the same periods.

Bullish political news is driving the rally, with a poll today showing a 10 point lead for presidential candidate Jair Bolsonaro. That seems to be a sharp swing from last week, when news reports suggested he would lose to leftist candidate Fernando Haddad.

Brazil ETF (EWZ) with daily changes and 50-day moving average.

The election is scheduled for this Sunday, October 7. If neither politician wins a majority (which often happens in Brazil), a second round will be held on October 28. Polls show Bolsonaro and Haddad tied in a potential head-to-head second round.

Here are some of the big symbols to watch when it comes to Brazil:

  • iShares Brazil ETF (EWZ) is the busiest symbol, averaging over 240,000 options contracts per session in the last month.
  • Petrobras (PBR): The quasi-public oil company is the only other Latin American stock to trade more than 100,000 options contracts on a daily basis.
  • Vale (VALE): The metals company ripped to a new multiyear high today.
  • Gerdau (GGB): A Sao Paulo-based steelmaker.
  • Banco Bradesco (BBD) and Itau Unibanco (ITUB): Brazil’s two largest banks.
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David Russell is VP of Market Intelligence at TradeStation Group. Drawing on two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them apprised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.