Brazilian equities remain a strong opportunity against other global emerging markets because fiscal easing, rate cuts and Brazil's critical-minerals edge survive election results. Brazil is down only 6% for the month after an earlier rally and remains near its four-month range. Lula's terms have been net positive for EWZ; this is a bet on Brazil's outlook, not on who wins the presidency. x.com  x.com  x.com 

Nu Holdings is one of the most direct beneficiaries of lower Brazilian rates, which Brazil's election could bring. Deposit costs run at about 88% of interbank rates while card and loan yields adjust slowly, so its 22.9% net interest margin could widen. Lower rates also ease borrowers after 90+ day delinquencies rose to 6.9%, and a stronger real lifts dollar results, with about 85% of customers in Brazil. Nothing is locked in: the runoff, policy and borrower programs could still go differently. … Show more

Inter & Co's newer cohorts do not mature at the same rates as older ones despite higher starting ARPACs, putting it at risk of serious trouble in the next credit cycle. Its leverage is much higher than Nubank's, yet its risk-adjusted returns are 5-6% against Nubank's 10-12%. Inter's ROE is below the 16%+ cost of capital for Brazilian fintech banks, leaving it unclear whether it can earn above that hurdle over time. x.com 

Brazilian equities look uninvestable as the political shift toward socialism threatens to make an already poor inflation-adjusted long-term bet worse. The Brazil ETF's sharp decline after the political outcome illustrates the concern, though individual winners remain possible. x.com  x.com  x.com 

Brazil could be the Q4 macro story after Flávio Bolsonaro won the election's first round and, with most eliminated votes leaning right, became the runoff favorite against Lula. Brazil-linked stocks were priced for disaster on US yields, election risk and rate fears. Nu is the quality blue chip, while Inter & Co and PicPay have far more room to grow and are much cheaper; StoneCo, PagSeguro, dLocal and MercadoLibre are also candidates. x.com  x.com  x.com 

Lula's fourth mandate has dealt Brazilian equities a political shock, with a risk of deeper losses after the initial selloff. EWZ fell about 18% overnight and 27% by morning; the intraday recovery does not settle what comes next, given the much deeper falls after Argentina's 2019 primary-election shock. x.com  x.com  x.com 

Nu Holdings and Inter remain worth owning, and a Lula loss in Brazil's election shouldn't be the default assumption: not a single poll shows Flávio Bolsonaro ahead, and the betting market has gotten way over its skis. @EconomieReel argues Flávio is not winning and would be worse for Brazil than his father, while anyone other than Lula or a Bolsonaro would be bullish. x.com 

MercadoLibre and Nu Holdings have massive runways and have thrived across political backdrops, so they do not need tax cuts or deregulation to keep winning. Both have performed extremely well in Brazil under Lula since 2023, even in a fragile macro backdrop. The election-driven selloff left these cream-of-the-crop businesses at lower multiples, and more near-term selloffs are possible. x.com  x.com  x.com  x.com 

Brazilian domestic-market companies such as Nu, XP, Itaú, Bradesco, PagSeguro, CSN and Inter stand to benefit from a falling exchange rate, so positioning belongs in the domestic market. The exporters Petrobras and Vale are the ones falling today, which fits that call. The view was laid out in an iProfesional article on which CEDEARs could take off depending on whether Lula or Flávio Bolsonaro wins Brazil's elections. x.com 

Banco Santander Brasil offers exposure to a stronger Brazilian currency, with a dividend yield above 7% and consensus estimates of sharply accelerating EPS. Its post-election pullback does not make sense. x.com