Brazil's Real Is Slumping, Yet Stocks Find an Anchor in Earnings
- Earnings growth, cheap valuation somewhat offset uncertainty
- Emerging market rout is hurting the currency, not stocks
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Improving corporate results are propping Brazilian stocks up and helping ease the blow from election uncertainty that’s sent the currency near its lowest level ever.
Earnings have been coming in solid and should continue doing so through the end of 2018, analysts say, due mostly to a combination cost reductions and record-low interest rates. It’s a welcome change after years of falling profits as Brazil weathered the worst recession in history. Corporate earnings are expected to grow 32 percent in 2018 and 19 percent in 2019, according to Roberto Serwaczak, Citigroup’s head of Latin America equity.