Bolsonaro Wins Brazilian Presidential Election

Brazilian stocks soared Monday following presidential elections in the country.

What Happened

Far right candidate Jair Bolsonaro scored a decisive victory in the run-off Brazilian presidential election, landing 55.2 percent of the vote. His competitor Fernando Haddad drew 44.8 percent of the vote.

Why It’s Important

Bolsonaro ran on a platform that's geared toward improving the economy. Brazil’s economy has been under pressure in recent years, and Brazilian voters seemed to fear Haddad would continue the status quo. Bolsonaro has said he will prioritize cracking down on corruption, making the Brazilian central bank more independent, and transitioning state-run companies to the private sector.

Bolsonaro has been criticized for his controversial past comments related to race, women and homosexuality.

Former Brazilian President Luiz Inacio Lula is currently serving a 12-year prison sentence for corruption. Under Lula’s leadership, Brazil’s national deficit expanded significantly, and the nation’s pension system became unstable.

On Monday, investors cheered Bolsonaro’s victory:

• iShares MSCI Brazil Index EWZ was up 1.7 percent.
• Embraer SA ERJ up 1.8 percent.
• Petrobras Brasileiro PBR up 0.9 percent.
• Itau Unibanco Holding SA ADR ITUB up 2.7 percent.
• Telefonica Brasil SA VIV up 2.6 percent.
• Gerdau SA ADR GGB up 0.8 percent.
• Braskem SA BAK  up 2.6 percent.
• Companhia de Saneamento Basico SBS up 5.2 percent.
• Banco Bradesco SA BBD up 1.5 percent.
• AMBEV S A/S ADR ABEV up 1.6 percent.

What’s Next

Investors will be watching closely to see if Bolsonaro follows through with his campaign promises of eliminating corruption and kickstarting the economy.

Related Links:
Brazilian Stocks Soar On Election Results

Wall Street Is Warming Up To Petrobras

Photo credit: Janine Moraes / Chamber of Deputies (Public domain)