Summary · why it matters
U.S.-listed shares of Brazilian companies rallied on Monday after right-wing Senator Flavio Bolsonaro outperformed polls in the first round of Brazil's presidential election. Bolsonaro took 47% of the vote and will face President Luiz Inacio Lula da Silva, who received about 45%, in a runoff near the end of the month; polls had expected Lula to finish first. Petrobras' ADRs jumped about 10% in U.S. premarket trading, while Banco Bradesco and Itau Unibanco also surged more than 9%, Nu Holdings soared 10.5%, Vale SA rose 8%, Ambev SA gained 7%, and Embraer's shares advanced over 6%. Ivo Chermont, chief economist at Quantitas, said investors will wake up to a very powerful rally across asset classes, forecasting a 2% to 4% fall in the dollar, a 4% to 6% rise in equities, and significantly tighter nominal and real interest rates. Markets will nonetheless look for clear signals from Bolsonaro that he is serious about tackling the country's problems, with scandals involving the leading candidates expected to follow them into the second round.
Banco Bradesco SA ADR
Itau Unibanco Banco Holding SA
ABB Ltd
Ambev SA ADR
Embraer S.A.
Embraer SA ADR
Nu Holdings Ltd
Petroleo Brasileiro Petrobras SA ADR
Vale SA ADR