{"id":671352,"date":"2026-09-20T01:35:00","date_gmt":"2026-09-20T01:35:00","guid":{"rendered":"https:\/\/buglecall.org\/?p=671352"},"modified":"2026-09-20T01:35:00","modified_gmt":"2026-09-20T01:35:00","slug":"foreign-capital-returns-to-brazil-as-goldman-clients-see-20-stock-rally-if-bolsonaro-defeats-socialist","status":"publish","type":"post","link":"https:\/\/buglecall.org\/?p=671352","title":{"rendered":"Foreign Capital Returns To Brazil As Goldman Clients See 20% Stock Rally If Bolsonaro Defeats Socialist"},"content":{"rendered":"<p><span class=\"field field--name-title field--type-string field--label-hidden\">Foreign Capital Returns To Brazil As Goldman Clients See 20% Stock Rally If Bolsonaro Defeats Socialist<\/span><\/p>\n<div class=\"clearfix text-formatted field field--name-body field--type-text-with-summary field--label-hidden field__item\">\n<p>Brazil&#8217;s <a href=\"https:\/\/www.zerohedge.com\/political\/bolsonaro-lula-neck-and-neck-brazil-markets-bet-rightward-shift\">tightening presidential race<\/a> could drive a sharp repricing of local equities.<\/p>\n<p>A new Goldman Sachs survey of 70 global investors found that <strong>half see at least 20% upside in EWZ, the US-listed Brazil equity ETF, by year-end if right-wing challenger Fl\u00e1vio Bolsonaro defeats socialist President Luiz In\u00e1cio Lula da Silva<\/strong>. The first round is scheduled for Oct. 4, with a potential runoff on Oct. 25.<\/p>\n<p><a data-image-external-href=\"\" data-image-href=\"\/s3\/files\/inline-images\/2026-08-28_14-20-20.png?itok=yydngcJz\" data-link-option=\"0\" href=\"https:\/\/cms.zerohedge.com\/s3\/files\/inline-images\/2026-08-28_14-20-20.png?itok=yydngcJz\"><\/a><\/p>\n<figure role=\"group\" class=\"caption caption-img inline-images image-style-inline-images\"><img fetchpriority=\"high\" decoding=\"async\" alt=\"\" data-entity-type=\"file\" data-entity-uuid=\"cb964dc7-8755-4f7f-b01f-281447b12391\" data-responsive-image-style=\"inline_images\" height=\"269\" src=\"https:\/\/assets.zerohedge.com\/s3fs-public\/styles\/inline_image_mobile\/public\/inline-images\/2026-08-28_14-20-20.png?itok=yydngcJz\" width=\"500\" \/><figcaption><em>Lula (Left);\u00a0Bolsonaro (Right)<\/em><\/figcaption><\/figure>\n<p><\/p>\n<p>Goldman Sachs Managing Director Nelson Armbrust\u00a0<span>provided clients color on the upcoming elections in South America, <strong>which could cement a historic, once-in-a-generation<\/strong><\/span><strong><a href=\"https:\/\/www.zerohedge.com\/political\/bolsonaro-lula-neck-and-neck-brazil-markets-bet-rightward-shift\">\u00a0rightward shift across the continent<\/a>.<\/strong><\/p>\n<p><strong>Related:<\/strong><\/p>\n<ul>\n<li><em><a href=\"https:\/\/www.zerohedge.com\/geopolitical\/brazil-historical-crossroads\"><strong>Brazil At A Historical Crossroads<\/strong><\/a><\/em><\/li>\n<\/ul>\n<p>He focused on <strong>positioning<\/strong>:<\/p>\n<p><strong><em>Fl\u00e1vio Bolsonaro (right-leaning candidate) is gaining momentum; polls show him tied or closing the gap in the second round.\u00a0<\/em><\/strong><\/p>\n<p><em>As a reminder, pools don&#8217;t adjust for the likely voter (aka: the people that actually turn up on the day to cast a vote, no mail ballot votes in Brazil), and historically there has been higher absence from Lula&#8217;s voters.\u00a0<\/em><\/p>\n<p><em>We just did a <strong>survey with 70 global investors<\/strong> about their cross-asset views in Brazil, the bottom line:<\/em><\/p>\n<ul>\n<li><em>Equities is the least owned asset class (60% are either &#8220;very light&#8221; or &#8220;light&#8221;) and it is the vehicle this group sees the most upside (half see <u><strong>EWZ at least +20% by year end if Flavio wins<\/strong><\/u>) From my convos, local Equity investor positioning is a 6\/10 while local Macro accounts are small in equities (3\/10).\u00a0<\/em><\/li>\n<\/ul>\n<p><strong><em>Foreign capital is starting to come back to Brazil as we near the event:<\/em><\/strong><\/p>\n<p><a data-image-external-href=\"\" data-image-href=\"\/s3\/files\/inline-images\/Goldman1.png?itok=YjlhtWX-\" data-link-option=\"0\" href=\"https:\/\/cms.zerohedge.com\/s3\/files\/inline-images\/Goldman1.png?itok=YjlhtWX-\"><img decoding=\"async\" data-entity-type=\"file\" data-entity-uuid=\"b56b86a2-c497-4aa5-a945-92255a443db2\" data-responsive-image-style=\"inline_images\" height=\"319\" width=\"500\" class=\"inline-images image-style-inline-images\" src=\"https:\/\/assets.zerohedge.com\/s3fs-public\/styles\/inline_image_mobile\/public\/inline-images\/Goldman1.png?itok=YjlhtWX-\" alt=\"\" \/><\/a><\/p>\n<p><em>We have seen <strong>massive buying of upside from investors<\/strong>, <strong>EWZ Call Open Interest at ALL TIME HIGHS:<\/strong><\/em><\/p>\n<p><a data-image-external-href=\"\" data-image-href=\"\/s3\/files\/inline-images\/goldman%20.png?itok=JxT_5mUr\" data-link-option=\"0\" href=\"https:\/\/cms.zerohedge.com\/s3\/files\/inline-images\/goldman%20.png?itok=JxT_5mUr\"><img decoding=\"async\" data-entity-type=\"file\" data-entity-uuid=\"2fa106d4-f586-4cba-83f1-e7addbc6fab6\" data-responsive-image-style=\"inline_images\" height=\"343\" width=\"500\" class=\"inline-images image-style-inline-images\" src=\"https:\/\/assets.zerohedge.com\/s3fs-public\/styles\/inline_image_mobile\/public\/inline-images\/goldman%20.png?itok=JxT_5mUr\" alt=\"\" \/><\/a><\/p>\n<p><u><strong><em>Implementation: I like EWZ Call Spreads for November (runoff is October 25th) and going long our Rate Sensitive basket (GSBZRATE Index).<\/em><\/strong><\/u><\/p>\n<p><em>Implied 2 month vols have risen from ~30v to ~45v and past election cycles (noted on the graph below) show that vols could keep moving higher.<\/em><\/p>\n<p><a data-image-external-href=\"\" data-image-href=\"\/s3\/files\/inline-images\/gold%203.gif?itok=DR7Vn9ET\" data-link-option=\"0\" href=\"https:\/\/cms.zerohedge.com\/s3\/files\/inline-images\/gold%203.gif?itok=DR7Vn9ET\"><img loading=\"lazy\" decoding=\"async\" data-entity-type=\"file\" data-entity-uuid=\"6872f16e-e970-4538-ac0d-92bc4f32bc5b\" data-responsive-image-style=\"inline_images\" height=\"281\" width=\"500\" class=\"inline-images image-style-inline-images\" src=\"https:\/\/assets.zerohedge.com\/s3fs-public\/styles\/inline_image_mobile\/public\/inline-images\/gold%203.gif?itok=DR7Vn9ET\" alt=\"\" \/><\/a><\/p>\n<p><em>But the cost of the 30% delta call vs the 10% delta call has been stable lately and is historically cheap (21st percentile).<\/em><\/p>\n<p><a data-image-external-href=\"\" data-image-href=\"\/s3\/files\/inline-images\/goldman%204.gif?itok=pCfCiqDC\" data-link-option=\"0\" href=\"https:\/\/cms.zerohedge.com\/s3\/files\/inline-images\/goldman%204.gif?itok=pCfCiqDC\"><img loading=\"lazy\" decoding=\"async\" data-entity-type=\"file\" data-entity-uuid=\"59dabb7b-3f14-4b9c-98b3-81da83d4f4d1\" data-responsive-image-style=\"inline_images\" height=\"261\" width=\"500\" class=\"inline-images image-style-inline-images\" src=\"https:\/\/assets.zerohedge.com\/s3fs-public\/styles\/inline_image_mobile\/public\/inline-images\/goldman%204.gif?itok=pCfCiqDC\" alt=\"\" \/><\/a><\/p>\n<p><em>EWZ Nov 42 50 call spread = $1.00 offer 8x max payout, ref 37.20, ~45v ATMF, 23% delta, max loss is premium paid.\u00a0<\/em><\/p>\n<p><em>Another way to implement is going long GSBZRATE Index, they are the 30 stocks in Ibovespa most correlated to 5y rates. It is composed of Fins (38%), Real Estate (17%), Industrials (17%), Utilities (12%), Cons Disc (9%) and Materials (6%). You can trade U$75mn a day at 10% volume.\u00a0<\/em><\/p>\n<p><em>Brazil has the highest real rate in the WORLD (~10%) and is the most correlated EM Equity with local Rates. If rates come down, the move in Equities could be meaningful.<\/em><\/p>\n<p><a data-image-external-href=\"\" data-image-href=\"\/s3\/files\/inline-images\/goldman%206.jpg?itok=75Zx0L1U\" data-link-option=\"0\" href=\"https:\/\/cms.zerohedge.com\/s3\/files\/inline-images\/goldman%206.jpg?itok=75Zx0L1U\"><img loading=\"lazy\" decoding=\"async\" data-entity-type=\"file\" data-entity-uuid=\"2a468026-028b-4cdb-81fd-71c73f1aaef7\" data-responsive-image-style=\"inline_images\" height=\"386\" width=\"500\" class=\"inline-images image-style-inline-images\" src=\"https:\/\/assets.zerohedge.com\/s3fs-public\/styles\/inline_image_mobile\/public\/inline-images\/goldman%206.jpg?itok=75Zx0L1U\" alt=\"\" \/><\/a><\/p>\n<p><em>Below is a chart of the basket&#8217;s P\/E vs local short-term rates (Jan29 rates) inverted. As flagged by Louis Miller, one could expect a ~30%+ re-rating in GSBZRATE (P\/E going from 9x to 12x) if the local rates price in 200bps of cuts \u2013 from my investors discussions, 200-300bps is where most expect to see short term rates by year end if Flavio wins.<\/em><\/p>\n<p><a data-image-external-href=\"\" data-image-href=\"\/s3\/files\/inline-images\/goldman%209.png?itok=puO4e36B\" data-link-option=\"0\" href=\"https:\/\/cms.zerohedge.com\/s3\/files\/inline-images\/goldman%209.png?itok=puO4e36B\"><img loading=\"lazy\" decoding=\"async\" data-entity-type=\"file\" data-entity-uuid=\"a488e385-00f2-434f-a61e-0346fc5cf675\" data-responsive-image-style=\"inline_images\" height=\"244\" width=\"500\" class=\"inline-images image-style-inline-images\" src=\"https:\/\/assets.zerohedge.com\/s3fs-public\/styles\/inline_image_mobile\/public\/inline-images\/goldman%209.png?itok=puO4e36B\" alt=\"\" \/><\/a><\/p>\n<p><em>Historically when the market prices cuts, our Brazil Rate Sensitive Basket delivered ~3x the Ibovespa&#8217;s return (table below). The basket struggles if rates are cut due to recession risk or if there is a commodity boom (1\/3 of Ibovespa is commods). Quick explanation below on periods the basket did not outperform Ibovespa (and I don&#8217;t expect any of these scenarios to play out):<\/em><\/p>\n<ul>\n<li><em>Jan2010-Aug2010: economy and inflation were strong, CB started hiking and we had a bull flattening of the curve so the ongoing 5y came down.<\/em><\/li>\n<li><em>Jan2014-Aug2014: CB finished a hiking cycle on April 2014, economy started to decelerate sharply, mkt read it as &#8220;CB wont be able to keep rate high for long&#8221; so the 5y came down. Also, 2014 was an election year with Dilma x Aecio Neves (mkt thought Aecio, a right-leaning candidate, would win\u2026 but he lost and Ibovespa finished flat on that year.)<\/em><\/li>\n<li><em>Dec2015-Apr2018: huge commodities boom from China expanding, so Vale and Petrobras led the rally. Also in Aug2016 Dilma was impeached and Temer ran the country. During this time, markets rallied.<\/em><\/li>\n<\/ul>\n<p><a data-image-external-href=\"\" data-image-href=\"\/s3\/files\/inline-images\/goldman%2010.jpg?itok=jOK2VwdL\" data-link-option=\"0\" href=\"https:\/\/cms.zerohedge.com\/s3\/files\/inline-images\/goldman%2010.jpg?itok=jOK2VwdL\"><img loading=\"lazy\" decoding=\"async\" data-entity-type=\"file\" data-entity-uuid=\"836f344b-037d-4503-b98a-8e7666bb7ab3\" data-responsive-image-style=\"inline_images\" height=\"216\" width=\"500\" class=\"inline-images image-style-inline-images\" src=\"https:\/\/assets.zerohedge.com\/s3fs-public\/styles\/inline_image_mobile\/public\/inline-images\/goldman%2010.jpg?itok=jOK2VwdL\" alt=\"\" \/><\/a><\/p>\n<p>Earlier this month, <a href=\"https:\/\/polymarket.com\/event\/brazil-presidential-election\">Polymarket showed Bolsonaro overtaking Lula<\/a> for the first time, and that lead has held through Saturday morning. <strong>Bolsonaro&#8217;s odds of winning currently stand at 57%, while Lula&#8217;s are around 42%.<\/strong><\/p>\n<p><a data-image-external-href=\"\" data-image-href=\"\/s3\/files\/inline-images\/2026-09-19_09-18-01.png?itok=6558pOGZ\" data-link-option=\"0\" href=\"https:\/\/cms.zerohedge.com\/s3\/files\/inline-images\/2026-09-19_09-18-01.png?itok=6558pOGZ\"><img loading=\"lazy\" decoding=\"async\" data-entity-type=\"file\" data-entity-uuid=\"1332e2f2-00b6-4672-afc0-d4f3425be524\" data-responsive-image-style=\"inline_images\" height=\"513\" width=\"500\" class=\"inline-images image-style-inline-images\" src=\"https:\/\/assets.zerohedge.com\/s3fs-public\/styles\/inline_image_mobile\/public\/inline-images\/2026-09-19_09-18-01.png?itok=6558pOGZ\" alt=\"\" \/><\/a><\/p>\n<p>Brazilian stocks have rebounded alongside rising <a href=\"https:\/\/polymarket.com\/event\/brazil-presidential-election\">Polymarket bets on a Bolsonaro victory<\/a>.<\/p>\n<p><a data-image-external-href=\"\" data-image-href=\"\/s3\/files\/inline-images\/brazil_0.png?itok=wpX0Wvdi\" data-link-option=\"0\" href=\"https:\/\/cms.zerohedge.com\/s3\/files\/inline-images\/brazil_0.png?itok=wpX0Wvdi\"><img loading=\"lazy\" decoding=\"async\" data-entity-type=\"file\" data-entity-uuid=\"596ef955-8a12-4e92-b8fc-6bd48606d0b9\" data-responsive-image-style=\"inline_images\" height=\"262\" width=\"500\" class=\"inline-images image-style-inline-images\" src=\"https:\/\/assets.zerohedge.com\/s3fs-public\/styles\/inline_image_mobile\/public\/inline-images\/brazil_0.png?itok=wpX0Wvdi\" alt=\"\" \/><\/a><\/p>\n<p>A Bolsonaro win would cement a rightward shift after socialists spent years destroying the continent with <a href=\"https:\/\/www.zerohedge.com\/political\/forget-reminding-young-people-about-boat-people-south-americas-rejection-socialism\">nation-killing progressive experiments<\/a>.<\/p>\n<p><a data-image-external-href=\"\" data-image-href=\"\/s3\/files\/inline-images\/2026-09-10_09-31-58.png?itok=zcnKT9B6\" data-link-option=\"0\" href=\"https:\/\/cms.zerohedge.com\/s3\/files\/inline-images\/2026-09-10_09-31-58.png?itok=zcnKT9B6\"><img loading=\"lazy\" decoding=\"async\" data-entity-type=\"file\" data-entity-uuid=\"167361e5-af32-4f2d-8f76-f84dc83f010a\" data-responsive-image-style=\"inline_images\" height=\"602\" width=\"500\" class=\"inline-images image-style-inline-images\" src=\"https:\/\/assets.zerohedge.com\/s3fs-public\/styles\/inline_image_mobile\/public\/inline-images\/2026-09-10_09-31-58.png?itok=zcnKT9B6\" alt=\"\" \/><\/a><\/p>\n<p>Also, across the pond in Europe, Nomura analysts expect an 18-month election cycle that sees the continent &#8220;<a href=\"https:\/\/www.zerohedge.com\/political\/seeds-political-change-nomura-sees-europe-lurching-right-and-markets-are-fine-it\">lurching right<\/a>.&#8221;<\/p>\n<\/div>\n<p>      <span class=\"field field--name-uid field--type-entity-reference field--label-hidden\"><a title=\"View user profile.\" href=\"https:\/\/cms.zerohedge.com\/users\/tyler-durden\" lang=\"\" class=\"username\" xml:lang=\"\">Tyler Durden<\/a><\/span><br \/>\n<span class=\"field field--name-created field--type-created field--label-hidden\">Sat, 09\/19\/2026 &#8211; 21:35<\/span><img decoding=\"async\" src=\"https:\/\/assets.zerohedge.com\/s3fs-public\/styles\/inline_image_mobile\/public\/inline-images\/2026-08-28_14-20-20.png?itok=yydngcJz\" title=\"Foreign Capital Returns To Brazil As Goldman Clients See 20% Stock Rally If Bolsonaro Defeats Socialist\" \/><\/p>","protected":false},"excerpt":{"rendered":"<p>Foreign Capital Returns To Brazil As Goldman Clients See 20% Stock Rally If Bolsonaro Defeats Socialist Brazil&#8217;s tightening presidential race could drive a sharp repricing of local equities. A new Goldman Sachs survey of 70 global investors found that half see at least 20% upside in EWZ, the US-listed Brazil equity ETF, by year-end if&hellip; <a class=\"more-link\" href=\"https:\/\/buglecall.org\/?p=671352\">Continue reading <span class=\"screen-reader-text\">Foreign Capital Returns To Brazil As Goldman Clients See 20% Stock Rally If Bolsonaro Defeats Socialist<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":671353,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":[],"rop_publish_now_history":[],"rop_publish_now_status":"pending","footnotes":""},"categories":[17,22,13],"tags":[],"class_list":["post-671352","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-border-security","category-immigration","category-immigration-reform","entry"],"_links":{"self":[{"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/posts\/671352","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buglecall.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=671352"}],"version-history":[{"count":0,"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/posts\/671352\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/media\/671353"}],"wp:attachment":[{"href":"https:\/\/buglecall.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=671352"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buglecall.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=671352"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buglecall.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=671352"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}