As Latin America’s (ILF) largest country in terms of population and land size, Brazil (EWZ) is becoming a key player among the emerging economies (EEM) (VWO) (EDC). According to the French Ministry of Agriculture’s Center for Studies and Strategic Foresight, Brazil ranks third in the world’s major agricultural exporters. It is in fourth place for food products.
AmBev (ABEV) is the major Brazilian beverage company, which is mainly engaged in manufacturing various soft-drink products and beverage products. Brazil is the world’s largest producer and exporter of products such as coffee, soybean, sugar cane, and tobacco.
Agribusiness accounts for 38% of Brazil’s exports despite government fiscal stimulus to agricultural commodity (DBA) producers. Now, Brazil’s domestic consumption pattern is also changing.
Agriculture constitutes 5.8% of Brazil’s GDP, while it accounts for 2% in France (EWQ) and 0.6% in the United Kingdom (EWU). The agricultural commodity index has showed a strong move since 2003 with other commodities such as crude oil (USO) (BNO) and the metal index. The demand from the other emerging economies—mainly from China (FXI) (MCHI)—improved the demand for commodities.
Recent fall in the agricultural commodity index
The recent fall in the agricultural commodity index can be correlated to the rise in the US dollar (UUP) and the supply glut. Even El Niño’s effects couldn’t boost the agricultural commodity index, as high supply was wiping out the chances of a rise in prices.
According to a World Bank report, El Niño–related issues reduced the productions of a few commodities such as rice and palm oil, but these reductions weren’t sufficient to boost the agricultural index (DBA).
In the next part of this series, we’ll analyze how the recent fall in soybean prices could affect the Brazilian economy.
Brazil’s growth model has largely been export-driven, with commodities (DBC) such as iron ore and crude oil among its top exports.
Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.
The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.
Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.
Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.
As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.
Amazon is discontinuing its Amazon Restaurants service, which has been delivering food for restaurants in parts of the United States. Amazon Restaurants launched in the United States in 2015 and entered the British market the following year. However, it met strong opposition in the British market.