Morning Reads
- Pandering to Vladimir Putin Won’t Bring Peace to Ukraine
- How Does the Ukrainian Military Use Starlink?
- See How Airlines Are Navigating the Dangerous Skies to Avoid Global Conflicts
- Suhasini Haidar: India No Longer Sees the US as Benign
- Trump’s Plan to Import More Ground Beef Is Falling Short
- Canadian Cheese Was About to Become the Next Big Thing. Then Came the Tariffs
- How Tariffs Became the Most Hated Word in Politics
- As Inflation Continues to Lose Its Sole Meaning, Liberty Is Lost
- Treasuries’ AI Link Shows Sharp Shift as Haven Trade Returns
- A Tech Rotation Roils the Markets, Again
- Market Signals Are An Essential Tax On Bad Information
- Why Investors Must Stop Treating Research Reports As Truth
- AI Tech Fears Push Global Credit Spreads to 17-Month High
- Credit Score Competition Is Good News for Housing Affordability
- Dodgers Owner Mark Walter Wins Partial Nod to Slash Pile of Scrutinized Loans
- The Obscure Rule Helping to Supercharge Retail Trading
- Bitcoin Billionaires Are Racing to Ride a 3,000% Crypto Boom
- A Simple Way to Benefit From Rising Rates: Buy Money Market Funds
- CFOs Are First in Line for a C-Suite Shake-Up
- A.I. and New Rules for Accounting Are an Opportunity for Start-Ups
- Amex Shares Drop After Transaction Volume Misses Estimates
- China’s Parcel Sales Are Shrinking as They Become Tax Targets
- US Mortgage Rates Decline for First Time in Nine Weeks, to 7.32%
- That Grad School Loan May Cost You. It’s About Time
- There’s Nothing Special About Factory Jobs
- Jane Street and Rivals Are Now Fighting for AI Power as Well as Pace
- To Shape AI, Use AI
- Meta’s Muse Can’t Be a Freeloader’s Paradise Forever
- Apple’s iPhone Duo Hits Stores in Face of Short Supply and High Demand
- First-of-Its-Kind Vaccine Ushers in New Hope for Cancer Patients
- Novartis’ Kisqali Cuts Death Risk 19% in Breast Cancer Study
- An Existential Threat to THC Drinks Pits Willie Nelson Against Mitch McConnell
New transit: Driverless trains gain momentum as U.S. cities weigh automation costs.
Offensive drone strikes: Starlink restored, but Musk says Ukraine violated terms.
Financially strained: Halloween candy sales slump as inflation squeezes consumers.
Runoff shockwaves
This was not the result investors had anticipated. Brazil markets have entered panic mode, with the iShares MSCI Brazil ETF (EWZ) plunging more than 27% in premarket trading, after President Luiz Inácio Lula da Silva clung to power in Sunday's runoff election. It'll mark Lula's fourth term as president and will cement his control of the country just before his 81st birthday on Tuesday.
Bigger picture: In the first round of voting three weeks ago, Senator Flávio Bolsonaro, the eldest son of former President Jair Bolsonaro, took the lead. Most polls also put him ahead in the run-off election, in line with the right-wing victories seen across Latin America in recent years. Complicating matters, Bolsonaro has not yet conceded defeat to Lula, citing an "unacceptable" decision by a Lula-appointed Supreme Court justice, who issued a nationwide blanket order to extend voting by two hours.
Since mid-August, Brazilian markets had been undergoing some election-cycle positioning, but things really took off in early October in what became known as the "Bolsonaro Trade." Fiscal discipline, corporate tax reform, and potential privatization programs were priced in, sending Brazilian ETFs like (EWZ) and (FLBR) soaring following Bolsonaro's first-round win. Another big force was the strengthening of Brazil's real (USD:BRL), which can help tame inflation, reduce debt, and attract foreign capital.
SA commentary: Brazil is the world's tenth-largest economy, with a population of more than 200M people, though it's still "small regarding capital markets," SA analyst Kenio Fontes writes in Brazilian Elections 101: What Comes Next. "It's enough to say that in movements of euphoria, where a lot of foreign institutional investors want to buy a big Brazilian position, it can create kinds of distortions. High quality will always matter in Brazil; asymmetrical and high-beta positions can offer high upside, but for long-term total returns, I would prioritize more stable companies with wide moats and a very healthy balance sheet (not depending on much lower interest rates)." (26 comments)
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Today's Markets
In Asia, Japan -0.8%. Hong Kong +0.5%. China +0.2%. India +0.7%.
In Europe, at midday, London +0.4%. Paris +0.6%. Frankfurt +0.8%.
Futures at 7:00, Dow +0.4%. S&P +0.1%. Nasdaq -0.1%. Crude -2.3% to $100.91. Gold +0.5% to $4029.20. Bitcoin -0.5% to $80,170.
Ten-year Treasury Yield unchanged at 4.99%
On The Calendar
Companies reporting today include Verizon (VZ) and Welltower (WELL).