Brazil Is Desperately Hoping Those Crazy China Trade Numbers Are True

Brazilians are probably blasting the celebratory samba music after last night’s rosy
Chinese trade numbers(if you believe in that sort of thing). Some of the country’s most important stocks are up on the news after months of misery.

To review: China reported that exports jumped 5.1% year-over-year — stronger than the 2.0% economists expected — and imports surged 10.9%, surging past expectations for 1.0% growth.

That means relief for Brazil, whose stock market, Sao Paolo’s Ibovespa, has fallen 24% year to date. The almost 300 publicly traded stocks in Brazil have lost $US203 billion year to date.

This weekend, one of the country’s former Central Bank Presidents, Arminio Fraga, said that decline was, in part, due to weakened Chinese demand for Brazilian raw materials.

And today, on all that China trade number positivity, the Ibovespa has gained 4.4%. The iShares MSCI Brazil Index Fund (EWZ) — an ETF — that was getting pummelled earlier this summer during protests is rallying too. It’s up 3.5%

Over a quarter of EWZ’s weight is made up by two stocks — Vale, a mining company that sells a lot of iron ore to China, and Petrobras, the state oil and gas company. Both are rallying today up over 4.5%.

Now you may be saying to yourself — 4%… who cares? To put in perspective, both companies have had miserable 2013s. Petrobras is still down 31% year to date, and Vale is down 34% year to date.

So every little bit helps.

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