Brazil’s Money and Stock Market Have Become the Planet’s Strongest

Brazil's stock market, Bovespa Martin Weiss, author of the investment newsletter Money and Markets. has just examined the Brazilian market and the factors influencing the growth the economy is experiencing. He discusses Brazil's economy and how and why its marketplace is headed towards great growth.

Just last week, Standard & Poor's surprised the financial markets with an upgrade of Brazil's credit rating, prompting another surge in Brazilian assets.

"Brazil's currency, the real, jumped by the most since September, hit a new six-year high, and busted through the 2-per-dollar level for the first time since 2001," according to Dr. Weiss.

What are the forces behind Brazil's market blast-off this year?

The first force, he says, is the underlying firmness of Brazil's launch pad, its foundation for growth. Brazil's President, Luiz InΓ‘cio Lula da Silva, built that foundation by actually holding back the economy.

He paid off the country's debt to the IMF. He built a huge trade surplus and made big headway in balancing the federal budget. And he focused on stabilizing the currency.

For most of this decade, while China was growing by leaps and bounds, Brazil was lagging behind. But all that changed early this year: Brazil's government has taken new steps to unleash pent-up demand and let the economy start taking off.

"This investment explosion is key. With it, Brazil is revving up for an economic take-off that could rival China's and India's,"  Weiss explains.

Finally, Brazil's currency, the real, is the strongest among all major currencies in the world this year. Its stock market is leaping ahead of all other major markets. Brazil is now in the spotlight, beginning to attract a torrent of international capital:

South Korean car manufacturer Hyundai announced plans to open a new facility in Brazil. Brazilian airline TAM signed a partnership agreement with U.S. carrier United Airlines and a delegation of 16 Saudi businessmen are eyeing new investment opportunities.


  • Show Comments (12)

  • daffy_duck

    Hey, there may be hope yet!
    just saw this on Bloomberg…

    A complete overhaul of the tax system….. hmmmm …. if it’s real, it might make Brazil start to be like a real grown-up country πŸ™‚

  • daffy_duck

    Give me a break
    Mr Weiss would do well to live down in Brasil for a while before coming up with this rubbish. “Rival China and India…” … riiiight… Come down to Brasil and you will find the most beautiful country populated unfortunately by totally corrupt people. Then, throw in serious laziness (admittedly stoked by a public education system that is not worthy of the name of education) for good measure, coupled with crime past belief, and then you get a good foundation of what Brasil is really all about. Brasil will NEVER rival those countries… the system is totally committed to crushing a free market with insane beaurocracy and taxes on everything – anyone who lives in Brasil knows there are 2 economies – one open and the other a cash, or black market economy…. after all, who wants to use Nota Fiscals, right?

    Brasils performance as far as its currency and market is concerned is as a result of high interest rates and investments yields, not anything intrinsically good about the economy. The people in Brasil all expect this smoke and mirrors situation of strength to disappear at any time. Not for nothing you find the rich in Brasil very busy accumulating dollars, even though the the Real is so artificially strong right now.

    Lula bought the election with his Bolsa Familia and Fome Zero programs. The people in the south know what is going on and of course overwhelmingly voted for the other guy.

    The middle class is victimized and threatened by the poor, who by the way who only want a free handout and do not like work! Who in Brasil trusts another… ???? No-one… everyone is suspicious and distrusting of everyone else, and for good reason!

    Finally, the clarion jingoistic call of “BRASIIIIIIILLLLLLLLLL” makes every read blooded brasilian rise to his feet, after all, don’t we know that brasilians are better than everyone else πŸ˜‰

  • Osvaldo Coelho

    Brazil is not for beginners
    Just cool down. No need to get frustrated. Barzil is not for beginners. Try discovering what demographic window is all about and its effects and then come back and try to articulate some ideas. But since the beginners need a helping hand I make an analogy. When you plant something, you donlt see anything, but the seed is there germinating and it comes out and the populace says: Miracle!

  • conceicao

    I would not dismiss Dr. Weiss’s observations so easily. There has been enormous paper wealth generated in the Brasilian markets in recent years and the statistics I have seen indicate that Brasilians own
    70-80% of Brasilian equities for example. If you respect the theory (as I do) that Brasil’s lack of development relative to the first world is closely tied to a lack of indigenous capital complicated by the
    unfavorable terms of trade that have plagued producers of agricultural goods for the last 150 years, it is easy to credit Weiss and expect a significant pick up in GDP growth going forward as the paper
    wealth is recycled by private interests into high return investment opportunities in the domestic market. A lag effect between improvement in macro indicators and higher GDP growth would seem
    natural under this line of thinking as the financial markets by their nature tend to reflect future conditions more than the present.

  • João da Silva

    [quote]Doubtful the middle class is victimized and threatened by the poors ! [/quote]

    You junkie,you may be good in statistics,but poor in remembering the history of Bolshevism.Study the history of class struggle and find out how Lenin,Stalin, Mao Tse Dung,etc; came to power.Dont forget that shit in N.Korea nor that dictator in Mynamar.

    Daffy Duck made a valid statement and you are contesting him (and as usual) me. Sometimes I think that you are another card holding member of the Communist Party,full of hot air.

  • ch.c.

    The middle class is victimized and threatened by the poor,
    To E.harmony : therefore why Brazil has one of the World Worst Income Inequality ??????

    To daffy_duck, your “The middle class is victimized and threatened by the poor” : how could it be different in a country with one of the
    World Worst Income Inequality ?????

    As to the Bolsa Familia, sorry but the annual budget of 8 billion Reals for the program divided by 45 millions entitled people, equals to Real 0,50….PER DAY OR…….US$ 7,50….PER MONTH !!!!!!
    And the 8 billion Reals budget for the program is less than 2 % of the annual Federal Budget….for 25 % of the population !

    Doubtful the middle class is victimized and threatened by the poors ! Reality being …….POORS ARE THE VICTIMS OF INSANE POLICIES MADE

  • João da Silva

    To:Daffy Duck
    [quote]Come down to Brasil and you will find the most beautiful country populated unfortunately by totally corrupt people[/quote]

    I would like to modify this sentence: “Come down to Brasil and you will find the most beautiful country but unfortunately GOVERNED by totally corrupt people”

    Otherwise a great post,expressing the sentiments of Middle Class people and honest small and medium sized businesspersons.

  • ch.c.

    Great comments from readers !
    Looks like I am not alone….finally !

  • João da Silva

    E Harmony
    [quote]increasing the annual income of the poorest within the Brazilian nation (increasing their ability to spend), [/quote]

    Sure, increasing the annual income of the poorest by giving “Bolsa Familiar” and thus winning votes. Sorry, Harmony, I dont think that you understand the current sufferings of the Middle Class Brazilians who always strived hard to better the living conditions of the poor.

  • João da Silva

    [quote]What planet is the author on?? “balancing the federal budget”[/quote]

    As long as I remember,the Federal Budget has never been balanced

    [quote]the middle class is being squeezed through falling pay hikes, but consistent inflation[/quote]

    In English, there is a famous proverb: “To rob Paul to pay Peter”.ie.The Middle Class is being squeezed to pay and please the “Poor”.

  • e harmony

    Good for Brazil. Demonstrates that Lula’s route to taking care of Brazilian debt and increasing the annual income of the poorest within the Brazilian nation (increasing their ability to spend), if even by a little, has helped Brazil in the long run.

  • Jo

    What planet is the author on anyway?
    What planet is the author on?? “balancing the federal budget” is not true or even close, crime is increasing within the government, the middle class is being squeezed through falling pay hikes, but consistent inflation, and the only people earning money in Brazil are those in the stock market or criminals (most politicians go into this category).

    My favorite idea is that Lula has helped the economy by holding it back LOL!!! Wow, so Brazil and Lula really have a secret plan of screwing people for their own benefit….nice.

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