Market reacts badly to Lula's turnaround on Flávio Bolsonaro and opens new tax debate
Lula beat Flávio Bolsonaro by almost 4 pp in the second round, after being behind in the first. According to Estadão, the market reaction was negative.
BY THE X-TRADER NEWS NEWSROOM · REPORTING FROM ESTADÃO · 2 MIN
The financial market received Lula's victory in the second round of the presidential election, held on October 25, with discomfort. According to Estadão, which reproduces text from the British magazine The Economist, the reaction of investors was negative, a fact that draws attention because the final result came after a very different scenario.
In the first round, held around three weeks earlier, Lula was behind Flávio Bolsonaro. The turnaround, highlighted by Estadão as unprecedented, shows a recovery that no other candidate had achieved to reach the Presidency of the Republic.
In the second round, Lula beat Flávio Bolsonaro by almost 4 percentage points. The difference was enough to confirm the turnaround, but it did not eliminate the discomfort of part of the market with the result.
In January, Lula will be the first democratically elected president to begin a fourth term. The milestone increases the political weight of the new government and highlights the way it intends to conduct public accounts in the coming years.
The negative reaction highlighted by The Economist, reproduced by Estadão under the title that the market reacted badly to Lula's victory, is the starting point for this discussion. The original text provides the reasons that the publication presents for this reading, and it is worth reading the full article before drawing conclusions.
What changes for the investor
The negative reaction reported by Estadão indicates that part of the assets felt the result soon after the election, but the available information does not allow us to say whether this movement will continue. For those who invest in the stock market, Nasdaq, interest rates and the dollar, the way forward is to follow the fiscal agenda that the government presents, the trajectory of interest rates and the behavior of the exchange rate in the coming weeks, evaluating each decision according to one's own profile and risk tolerance.
Automatically translated from Portuguese.
