Midday update
Lula's surprise runoff win over Flavio Bolsonaro reversed expectations of market-friendly policy, sending $ITUB down 21.82% at midday.
Brazil repriced in a single session. $ITUB fell 21.82% at midday after Lula's surprise runoff win over Flavio Bolsonaro reversed expectations of market-friendly policy, while the S&P 500 rose 0.89% and the Nasdaq added 1.21%.
- Brazil selloff: Petrobras fell 16.48% as Lula's win caught investors positioned for a Bolsonaro victory. MercadoLibre dropped 9.96% on currency-devaluation and fiscal-policy worries.
- Energy M&A: Range Resources rose 15.93% after EQT announced an all-stock acquisition valued at more than $50 billion. The deal would create the largest vertically integrated US natural gas producer and is expected to close in Q1 2027.
- Analyst calls: StoneX initiated coverage of Lumentum at Buy with a $1,200 target, and the stock gained 8.02%. Barclays upgraded Tesla to overweight and raised its target to $450 from $370, and Tesla rose 6.52% as one of the session's most active names.
- Breadth: The semiconductors basket rose 2.87% with 11 of 11 names advancing, and technology gained 1.84%. Communication services lagged at -0.88%.
On the history, Petrobras has fallen 16% or worse nine times since 2006 and was higher one year later every time, with a median gain of 82.8%. That is a small sample against a political shock that is still unfolding.
Not financial advice. For informational and educational purposes only.
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