London Daily

Focus on the big picture.
Friday, Oct 09, 2026

Goldman Sachs Recommend to invest now in Brazil

Goldman Sachs Recommend to invest now in Brazil

On Thursday, Bloomberg put out a headline that it was time to buy the worst emerging market in the world - Brazil. The reason: things were so bad, they couldn't possibly get much worse.
Down more than 48% this year when measured in dollars, Brazilian stocks will benefit from growing appetite for risky assets and a recovery in commodities prices during the second half of 2020, Goldman Sachs strategists led by Kamakshya Trivedi wrote in a note to clients on May 20.

“Brazilian equities are an ideal bounceback candidate,” they said.

Brazil’s biggest risks are the twin crises of health and politics. Both are, quite literally, sick.

Brazil is poised to beat Russia soon as the second most infected coronavirus nation, trailing the U.S. They’ve been racking up about 14,000 new cases a day, with 20,000 on Monday. If Brazil keeps that pace, it will beat Russia in total cases before this month is through.

They have 291,579 cases so far to Russia’s 317,554. But Russia has peaked. Brazil hasn’t quite yet, based on Johns Hopkins University data and so there is a real risk that Brazilians will be banned from flying back to the U.S., even if they own a green card.

Why there isn’t a ban already is a mystery, but it seems like most Brazilians are not flying anyway.

The other risk is political. Opposition politicians, with nothing else better to do, want to impeach Jair Bolsonaro. At the moment, their does not seem to be any real appetite for it among the electorate.

So in the meantime, the man to watch in Bolsonaro’s cabinet is Paulo Guedes, the Economic Minister. If he stays, Wall Street’s happy. It’s one of the reasons why Goldman Sachs is throwing some love Brazil’s way.

But here is another trade that might work even better in the next few weeks than the iShares MSCI Brazil (EWZ) fund: iron ore giant, Vale.

Vale is up 30% from its low on March 23. The iShares MSCI Brazil (EWZ) is up 6.58%. Vale’s biggest competitor, Rio Tinto of Australia, is up 43.26% in the same period and Rio is the one Vale tracks.

Over the last three months, as the pandemic raged, Vale has shed 23% from its share price while Rio is down only 3.2%.

Investors have been buying Vale in expectation of today’s Chinese stimulus announcement. Whatever it will be, it will likely be supportive of infrastructure investments. So they will need more iron ore to feed their steel mills. It’s going to come from Vale and Rio. But China and Australia are at each other’s throats because of the pandemic. China slapped an 80% tariff on one Australian commodity already, barley.

If China and Hong Kong politics flare up again over a proposed national security bill, something the pro-democracy protesters will see as an end-around the 2018 uprisings over the extradition law, now shelved, then what is stopping Australia from joining with U.K. and U.S. in admonishing China for changing its One Country, Two Systems approach?

Assuming China and Australia’s relations tear a bit, Vale benefits short-term.

There are definite headwinds to the Vale story, though.

A total of 88 vessels carrying 13.51 million metric tons of iron ore arrived at major Chinese ports between May 10 and May 16, according to SMM News, a metals data source provider in China. The volumes were down 540,000 metric tons from the prior week.

For the same week, iron ore deliveries leaving Australian ports rose by 200,000 tons on the week to 15.8 million, which is around 720,000 tons more than the same period last year when there was no such thing as the SARS coronavirus 2. Also known as the “good ole days”. The proportion of Australian iron ore destined for China increased from a week ago.

Shipments that departed Brazilian ports were estimated to fall by a whopping 560,000 tons from the prior week to 4.71 million million, roughly flat from the same period last year due to work stoppages.

Brazil’s Vale has resumed operations at its distribution center in Malaysia, at the Teluk Rubiah Maritime Terminal, but the coronavirus crisis in Brazil may keep Brazilian iron ore shipments from rebounding in the near term. They’ll get there.

The market is anticipating this.

Vale will fall when and if Brazil falls. But as long as China stimulus looks good on the infrastructure side, Vale should do well.
Newsletter

Related Articles

0:00
0:00
Close
UK Announces New Sanctions on 17 Russia-Linked Entities During Foreign Secretary's Ukraine Visit
UK and Germany Finalize Kensington Treaty to Strengthen Defense and Technology Cooperation
Britain Maintains Diplomatic Mission in East Jerusalem Despite Israeli Closure Deadline
English Councils Push Government to Rethink Proposed Funding Cuts
Scottish Homebuilding Falls to Lowest Level in 11 Years
BBC Chief Matt Brittin Defends Restructuring as Staff Challenge Job Cuts
UK Finance Warns High Energy Costs and Bond Yields Are Complicating Fiscal Outlook
UK Adopts All 44 Recommendations on Regulating AI in Healthcare
Chancellor John Healey Prepares Autumn Budget as Borrowing Costs Strain Public Finances
UK Investigators See Strong Indications of Iranian Link After RAF Fairford Security Operation
Laura Trott Pledges Tighter Controls on Political Activism in UK Classrooms
Welsh Ministers Launch Long-Term Review of North Wales and Anglesey Crossings
Welsh Government Orders 18-Month Study of Road Solutions Around Newport
Reform UK MP Sarah Pochin Faces Scrutiny Over £800,000 Second Home Purchase
British Households Grow More Concerned About Fuel and Energy Prices
NHS Leaders Warn of Rising Winter Pressure on Emergency Departments
Kemi Badenoch Proposes £2.3 Billion Employer National Insurance Cut for Young Workers
Middle East Conflict Could Erase UK Fiscal Headroom, Economists Warn
Manchester City Found Guilty of Multiple Premier League Financial Rule Breaches
UK Security Services Find Strong Indications of Iranian Role in RAF Fairford Incident
Costa Coffee Returns to Operating Profit on Iced Drinks and Menu Changes
Asos Warns Customers After Unauthorized Access to Retail App and Data
Kemi Badenoch Puts Growth and Deregulation at Center of Conservative Conference
Campaigners Warn of Deepening Social Care Crisis for Disabled Adults
Study Finds Rising Early-Onset Cancer Rates Among Adults Under 50 in Britain
UK Coach Operators Warn High Diesel Prices Could Force Route Cuts
FCA Opens Independent Review Into Handling of Epstein-Linked Whistleblower Case
Argentina Vows to Block Falkland Islands Offshore Oil Development
UK Chancellor Prepares Fiscal Measures and Welfare Reforms Ahead of Autumn Budget
Sainsbury’s and Morrisons Explore Potential Multi-Billion-Pound Merger
UK Weighs Tariffs on Chinese Electric Vehicles to Align With European Union
UK Threatens Diplomatic Expulsions Over Planned Closure of East Jerusalem Consulate
UK Energy Price Cap Hits Three-Year High as Middle East Conflict Raises Costs
Seventh Arrest Made in Suspected Terror Plot at RAF Fairford
Systemic Education Collapse Sparks Mass Student Uprisings in France
Green Party Faces Backlash Over Resolution Equating Zionism With Racism
Conservatives Debate Scrapping Environmental Rules for New Homes
Cornwall Insight Warns UK Energy Bills Could Approach £2,000 This Winter
UK Coach Operators Warn of Service Cuts as Diesel Prices Exceed £2
Scottish Parliament Approves £68 Billion Budget With New Tax and Property Measures
FCA Opens Independent Review Into Handling of Epstein Whistleblower
UK Government Drops Plan to Suspend Jury Trials in England and Wales
Bank of England Holds Interest Rate at 3.75% as Markets Watch November
Two Iranian Nationals Charged Over Alleged Plot Targeting Manchester Jewish Community
UK Fiscal Headroom Halves to £11 Billion Ahead of Budget, EY Warns
US Bomber Withdrawal From RAF Fairford Prompts UK Security Review
Sarah Wakfer Appointed Chair of Northern Ireland’s Health and Care Regulator
Scotland Housing Completions Fall to 11-Year Low Amid National Shortage
UK Water Companies Face Tougher Oversight and Unannounced Regulatory Inspections
Middle East Conflict Pushes UK Fuel and Wholesale Energy Prices Higher
×