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Brazil Hits Two Records: Stocks Surpass 47,000, Country Risk Plummets to 154

São Paulo Stock Market in Brazil

São Paulo Stock Market in Brazil For the first time ever Brazil's Bovespa (São Paulo Stock Market) topped this Monday, April 9. the 47,000 points barrier. The record showing happened the same day Brazil had another top achievement to celebrate: the Brazil risk – an index that measures the distrust of foreign investors – fell ten points to an all time low of 154 points.

The Brazilian markets had been closed for four days to celebrate Easter holiday.

The reason for the bullish state of the Brazilian markets seems to be the good news coming from the US economy, especially the healthy number of new jobs created in the American labor market in March, which should dispel a possible crisis in that country.

The jobs data were released Good Friday when the stock markets were closed in both Brazil and the US and only were felt today in Brazil.

On another economic front, exports from Brazil yielded US$ 2.528 billion last week, or US$ 632 on average per business day, a 16% increase in the daily average compared with April last year.

Imports, on the other hand, totaled US$ 1.669 billion, or US$ 417 million on average per business day, 11.6% more than in April 2006. The trade balance for the week recorded a US$ 859 million surplus. The data were disclosed today ) by the Brazilian Ministry of Development, Industry and Foreign Trade.

In the accumulated result for the year, Brazilian exports reached US$ 36.447 billion, a 13.1% increase compared with the same period last year.

Imports totaled US$ 26.89 billion, 24.1% more than in the same period in 2006. The trade balance for the year stands at a US$ 9.557 billion surplus.

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  • AES

    Brazil
    A high interest rate is good for foreign investment, as money seeks its greates return. The strength or weakness of the Real is manifested in the world purchasing 26% more exported products at an increased price of nearly 30%. All commodity prices are up globally, oil, gold, iron ore, those products necessary for expansion of expanding economies ie China and India, compete for natural commodities, raising obviously the price of said commodities. Stock markets are based on reality and the perception of reality. You can scare a stock market, but if the fundamentals are sound the market will continue its strength. The dollar has lost 30% of its buying power vis a vis gold. The Real has increased its buying power vis a vis gold by thirty percent. You can buy thirty per cent more gold with Real’s now than you could two years ago. So vis a vis gold the Real is not U.S. dependent. And gold is a global measure of the value or strength of a currency. The Real strength exists independently of the U.S. opinion of its value. It has begun to demand its own value. The price of iron ore is up 70% the profit as a consequence of the increase in the value of the Real is up 30%, these and other export and import issues (imported goods now cost 30% in terms of Reals than three years ago). The connection to the U.S. market is psychological, as was the connection to the Chinese market. The market rises and falls on fact and the appearance of fact. It is the appearance of fact that the Brazilian market is rising in strength, over the past three years. I remember when I exchanged one dollar for 285 Yen, the dollar buys 119 Yen today. Both the Yen and its economy have strengthened in tandem.
    The Real is able to buy imported capital goods, those goods that are used in manufacturing, and infrastructure, for thirty percent less then three years ago. With these goods the Brazilian economiy will transition to a more added value economy. You cannot compete against natural resources, you either have them or you do not.

  • João da Silva

    To:Swiss Pride
    [quote]So Mr.Ch.c once again you are OUTSMARTED and OUTCLASSED
    [/quote]

    Thanks.I keep on saying that this SOB is a leftist retard,a Commie,worshipper of Fidel and Hugo. Nobody listens to me.

  • Swiss Pride… laugh laugh laugh

    So Mr.Ch.c once again you are OUTSMARTED and OUTCLASSED
    by a bunch of people with a cephalic mass 100 X the size of yours. What I expected from somebody like you…”The voodoo king of economics…The emperor of backyard macroeconomics… The Czar of Globalization” laugh laugh laugh…all this, only in your own miniscule SICK MIND, of course.
    Let us hear you talk economics Mr.Ch.c with yours NOT so solid fundamentals. Its time for you to turn off the light Mr. Ch.c. À¢€¦take your favorite gun with youÀ¢€¦ go for a long lonely walk and do NOT Brazil BUT your own country a favor by INSTANTANEOUSLY increasing the Swiss À¢€œper capitaÀ¢€Â IQ for generations to come.

  • Professor

    Vale a Vale
    My CVRD stock has risen 54% in the last 12 months, Viva Vale!!!
    However, my Petrobitch stock has only increased 10%, que isso?
    Go Brazil!!

  • Andreas Andreou

    May all go well for Brazil
    Interest rates are falling, the real is strengthening substantially, trade surplus remains high with increasing exports and imports, low inflation, economic outlook is improving and the status of Brazil as an foreign investment place is improving. Could things be going better for Brazil? No. And Brazil is at a historic point in time, where all the economic indicators are clicking just right. The government with its massive investment plan for the economy has been doing perhaps the best possible thing along with the steady reduction of interest rates. Now they need to deal with bureaucracy.

    By the way, high interest rates attract immense foreign liquid capital because people would bank their money in countries with the highest interest rate return aka Brazil. High interest rates are not necessarily bad. But if the guys who keep pointing it out as a purely bad thing show their poor knoweledge of economics and their true-only-to-bash reason for posting.

    Brazil’s economy is now a fully equiped, manned and fueled missile. Will the government press the blast off button? We are yet to see! May all go well for Brazil!

  • conceicao

    Last week the Brasilian government sold $500 million in 10-year bonds priced at 100.796 to yield 5.888% or 1.22 points above U.S. Treasury bonds – quite a difference compared to the blood money
    being extracted from Brasil in the run-up to the 2002 elections after Argentina imploded. Brasil’s sovereign debt now trades at two notches below investment raise with one ratings boost
    considered a given in the near future. A year from now Brasil could be an investment grade credit with a continuing large primary surplus and with domestic real interest rates at multi-decade lows.

    Meanwhile, look at Venezuela where the public went crazy buying a PVDSA dollar-denominated bond issue in the probably vain hope that they can save something if Bolivarianism devolves into
    hyper-inflation.

  • ch.c.

    I have to say Brazil is on the right track.!!!!!!
    But….but…….funny that foreigners have more trust in your country than yourselves.
    Otherwise you would not have….. TODAY….AFTER 14 interests rates cuts…..STILL THE WORLD HIGHEST INTERESTS RATES…..AFTER INFLATION….in local currency borrowings !!!!!!!

    Take it as a critic or as a remark, but this is FACT !

    Dont be blind, especially since most of your debts are in LOCAL currency and NOT in foeign currency !!!!!

    Just think of it : YOU the taxpayers and the whole society (even those not paying taxes) are the ONES PENALIZED !!!!!!!

    And interests rates CHARGED by your banks are way above 50 %….or AROUD 46 % ABOVE THE INFLATION !!!!!!

    UNHEARD OF IN THIS WHOLE PLANET……EXCEPT IN…..BRAZIL….OF COURSE !!!!!!!!

    You are taken for a ride and idiots by those governing your country.
    Not only you do nothing against that…..but you are proud of your failures !!!!!

    Thus I should not be that wrong when I write that Brazilians are IDIOTS…..SINCE THIS IS EXACTLY WHAT YOUR POLITICIANS ARE
    DIRECTLY CONFIRMING !!!!!!

    Yesssssss…… VIVA BRAZIL…..the country where when you buy 1, you pay a minimum of 2 or even 3 !!!!!!!

  • Forrest Allen Brown

    The incestuous relationship between government and big business thrives in the dark.
    so as to say if the united states sneezes Brazil’s gets the cold !!!

    LULA always says Brazil is not tied to the US economy

    well what are we to think

  • Guest

    Continued Good Results
    Brazil’s economy continues to progress forward slowly despite all of the negative comments on this site and the odds. What are the odds? The strenghtening real which should have drastically reduced Brazil’s exports because they are now more expensive. Record imports which compete against brazilian manufactured goods, and high interest rates which makes capital for industrial and other investments to expensive. Despite these odds Brazil continues rack up an increasing trade surplus. Yes, I know most of the exports are raw material instead of finished products.
    However, this good news should allow the central bank more freedom to continue reducing interest rates thus enabling more economic growth. For the first time, I have to say Brazil is on the right track.
    Yes, I also know there are a lot of other things that are in need of being fixed and must be fixed in order for economic growth to continue, example crime, corruption and education just to name a few.

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