Podcasts Business Rich Insights Brazilian Equities Are Back From The Dead: Dead Cat Bounce?

Brazilian Equities Are Back From The Dead: Dead Cat Bounce?

Published: June 5, 2020, 4:39 p.m.

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Brazil is dealing with political and structural issues.  These have not gone away.

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Yet, Brazilian equities have bounced up over 30% in the last 2-3 weeks, in U.S. dollar terms.  Why?

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  1. Technicals: Prices arguably overshot to the downside.
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  2. Global Beta: Brazilian equities are rising alongside all other global equities.
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  3. Commodities: Investors are benefiting from the recovery in oil prices.
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  4. Currencies: U.S. based foreign investors are benefiting from the broad based U.S. dollar weakness
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My gut tells me this is a dead cat bounce, but what do the numbers say?  Can this trend continue?  Are there any other BRICs that might follow suit?

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