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 

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 

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 

Socialist politics are a poor backdrop for Brazilian equities. A 23% drop in EWZ is not a compelling long case when it merely returns prices to where they stood before the first election. x.com 

Crowded Brazil and EWZ longs are exposed after Lula's surprise election win, as reported by negligible_cap. MercadoLibre and many others are going to get absolutely nuked tomorrow. x.com 

Political fear after Lula election wins is a buying opportunity in Brazilian stocks, including EWZ, MercadoLibre and Nu Holdings. In USD, the table shows 12-month gains of 115% after 2002, 76% after 2006 and 18.5% after 2022, though shorter-term returns varied. x.com 

Brazilian equities could take months to absorb exits by funds unwilling to hold stocks under Lula, despite single-digit P/Es. The Bovespa looks to be putting in a 3.5-year cycle peak, and EWZ looks lower over the next few weeks or months. After a failed breakout, EWZ likely returns to the bottom of its consolidation near $26 weekly demand, though a short-term bounce may come first. x.com 

Nu Holdings' superior business model will win over the long term regardless of politics. Under Lula, its Q2 2026 presentation shows customers rising to 139 million, revenue per customer to $17, the efficiency ratio falling to 20%, and quarterly net income reaching $1.06 billion; Lula has since been reelected. x.com 

Brazilian equities offer commodity and critical-mineral exposure, faster renewable-powered data-center grid connections, and diversification from the US. EWZ's $702 million inflow on October 5 was the largest daily inflow in the chart's history. That supports the bull case as investors recognize Brazil's potential, though the rush also looks like reactive FOMO. x.com 

Nu Holdings' sustained growth makes election-driven pessimism look overdone. Quarterly revenue before credit-loss provisions grew at a 45.1% annualized rate from Q1 2023 to Q2 2026 under Lula. This Brazilian shock looks like the tariff scare, when markets quickly shrugged off initial pessimism. FedexSTi notes that Nu reached 139 million customers and $1 billion in quarterly net income after enduring Brazil's 2014-16 recession, Dilma's impeachment and the pandemic. x.com  x.com  x.com