“However this may play out, we believe that our stated view — that the opposition is likely to win and the market consequences of this — has been reinforced by what can legitimately be regarded, from a Brazilian point of view, as a tragic sporting defeat,” Volpon wrote in a note obtained by Bloomberg.
Commentary pertaining to Brazil’s defeat serving as lightening rod for Rousseff’s eventual defeat does not end there.
“Brazilians might feel that their team’s lack of leadership on the pitch reflects something much bigger — namely, lackluster political leadership at the national level. Their disappointment is likely to be visible quite soon in President Dilma Rousseff’s popularity ratings. With campaigning for the presidential elections set to start shortly, Brazil’s football disaster could well play a role in frustrating Rousseff’s re-election bid,” wrote Mohamed A. El-Erian in a Bloomberg commentary.
So one way of looking at the aftermath Brazil’s World Cup disappointment (hey, there’s still the third-place game) is that a surprising buying opportunity has been created in EWZ and other Brazil ETFs. However, buyers of Brazil ETFs need more negativity to realize profits. That is negativity in the form of glum polling numbers for Rousseff. [Brazil ETF Rallies on Poll Results]
iShares MSCI Brazil Capped ETF