Leaders of Brazilian center parties forming the so-called Centrão, which forms the coalition of DEM, PP, Solidariedade, PR, Avante, PRB and PHS, stated they will support Alckmin in this year’s election in October, Folha de S.Paulo reports. The coalition would provide Alckmin with greater political reach and the best recognition through television advertisements.
“The latest wave of opinion polls in Brazil show that market-friendly presidential candidate, former Sao Paulo Governor Geraldo Alckmin trails and highlighted voter support for the Workers’ Party, known as PT,” according to Bloomberg. “In the first half of the year, EWZ had almost $630 million of net inflows. But that changed in July as investors pulled $342 million.”
Despite the difficulty in predicting the next president, there are still constructive drivers that should benefit stocks over the next few months. For instance, J.P. Morgan expects Brazil to post the best corporate earnings growth in 2018 among Latin American peers. Additionally, a number of its industries are linked to commodities, which benefit from a weaker real currency.
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