Symbol: BPC.BR

LATAM Weekly Summary

Posted on by Romeo Alvarez

Argentina: Uptrend Under Pressure

Brazil: Uptrend Under Pressure

Mexico: Downtrend

Commentary

Brazil’s main equity benchmark sold off last week, falling 3.35% on heavy volume. Due to the elevated number of distribution days (eight) and the lack of new breakouts in leading stocks, we recently moved Brazil’s market to an Uptrend Under Pressure from a Confirmed Uptrend. Although Brazil continues to be one of the best emerging markets globally, many leading names are now extended from proper buy points or are in the process of forming new bases. As we expected, the Bovespa benchmark is testing support at the rising 50-DMA. We believe the benchmark is likely to catch support around this moving average line or near 90,000.

LATAM Weekly Summary

Posted on by Romeo Alvarez

Argentina: Confirmed Uptrend
Brazil: Uptrend Under Pressure
Mexico: Rally Attempt
Commentary
Brazil’s main equity benchmark advanced 0.37% last week and remained above key levels of support. However, due to the
elevated number of distribution days (

) and the lack of new breakouts in leading stocks, we recently moved Brazil’s market to
an Uptrend Under Pressure from a Confirmed Uptrend. Although Brazil continues to be one of the best emerging markets
globally, many leading names are now extended from proper buy points or are in the process of forming new bases. We believe
the Bovespa benchmark might test support at the rising 50‐DMA before breaking into all‐time highs again (>100,000 level).
Leading sectors are those with direct exposure to the domestic economy, including Transportation, Health Care, Utility, Financial,
Retail, and Consumer Cyclical. The Utility sector is currently the absolute best sector in Brazil, mostly due to the expectations of
industry privatization. Conversely, Basic Materials is the worst performer in Brazil’s market.

LATAM Weekly Summary

Posted on by Romeo Alvarez

Argentina: Confirmed Uptrend
Brazil: Uptrend Under Pressure
Mexico: Confirmed Uptrend
Commentary
Last week, Brazil’s main equity benchmark fell 2.62% after advancing for six consecutive weeks. Due to the elevated number of
distribution days and the lack of new breakouts in leading stocks, we moved Brazil’s market to an Uptrend Under Pressure from a
Confirmed Uptrend. Although Brazil continues to be one of the best emerging markets globally, many leading names are now
extended from proper buy points or are in the process of forming new bases. We believe the Bovespa benchmark is poised to
test support at the 50‐DMA or ~91,800 level on profit taking. Leading sectors are those with direct exposure to the domestic
economy, including Transportation, Health Care, Utility, Financial, Retail, and Consumer Cyclical. The Utility sector is currently
the absolute best sector in Brazil, mostly due to the expectations of industry privatization.

LATAM Weekly Summary

Posted on by Romeo Alvarez

Argentina: Uptrend
Brazil: Uptrend
Mexico: Uptrend
Commentary
Last week, Brazil’s main equity benchmark gained 0.2% and advanced for a sixth consecutive week. The index managed to record a gain despite a large drop in shares of index heavyweight Vale (‐18% last week). Although Brazil continues to be one of the best emerging markets globally and leading growth ideas continue to trade in a positive manner, many leading names are now extended from proper buy points. Avoid chasing extended names. Leading sectors are those with direct exposure to the domestic economy, including Transportation, Utility, Financial, Retail, and Consumer Cyclical.

LATAM Weekly Summary

Posted on by Romeo Alvarez

Argentina: Uptrend Under Pressure

Brazil: Uptrend

Mexico: Uptrend

Brazil’s main equity benchmark advanced 2.6% last week and hit new all-time highs. Brazilian equities continue to trend higher on expectations that President Jair Bolsonaro will pass measures to reduce crime and government involvement in the economy. The country’s new Economy Minister Paulo Guedes promised to lessen the government’s outsized role in the economy, cut Brazil’s tax burden to 20% of GDP from 36%, carry out privatizations, and tame government spending. Guedes, a University of Chicago-trained economist, added that pension reform (social security) was Brazil’s most important issue. Leading sectors are those with direct exposure to the domestic economy  and include: Transportation, Utility, Financial, Retail, and Consumer Cyclical.