Retail Shares Lead Brazil Rally as Rates Stay High

Brazil’s Ibovespa climbed 1.57% on Tuesday, led by retail stocks, as Magazine Luiza surged 14.8% on R$810 million in turnover. The index finished at 208,296, just shy of its record close of 209,067 on Oct. 9. The report tracks share prices and trading volumes, but it gives no figures on pay, employment, or union activity among workers at the companies whose shares gained.

Retail Gains, Uneven Trading

Magazine Luiza, ticker MGLU3, rose 14.8%. BHIA3 jumped 20.2% on R$35 million in turnover. Americanas (AMER3) added 15.6% on R$53 million, while MOVI3 gained 12.5% on R$254 million. The report said Americanas rose more than 15% on thinner trading.

Some listed companies fell. WIZC3, an insurance broker, dropped 20.0% on R$70 million in turnover. Petrobras preferred shares, which the report describes as shares of Brazil’s state-controlled oil giant, posted roughly R$2.5 billion in turnover. SMAL11, an exchange-traded fund that tracks smaller Brazilian companies, traded almost R$1.8 billion.

These figures show where trading gathered, not who owns the shares or how investors split the gains and losses. The report doesn’t provide earnings, dividend, wage, or job figures for the retailers named.

Rates and Currency Pressure

Brazil’s real barely moved, with the dollar at R$5.0278, down 0.11%. The Chilean peso strengthened 0.67% to 974.7 per dollar, and Colombia’s peso rose 0.50% to 3,159. Mexico’s peso held at 18.43, while Argentina’s peso barely budged at 1,525 per dollar.

Brazil’s Selic benchmark rate stood at 13.75% after a 0.25-point cut on Sept. 16. The next Copom decision was set for Nov. 4, and the report named foreign flows into B3 as a key indicator for the real. It gave no figures on the rate’s effects on household borrowers, wages, or public services.

Mexico’s IPC gained 0.36% across the region, closing at 69,259 for its fourth straight rise. It remained 3.3% below its February high of 71,601. Chile’s IPSA lost 0.42% to 10,926, 6.0% below its January peak of 11,628. The report’s market board listed Colombia’s COLCAP at 2,533.22, up 0.47%, and the S&P MERVAL at 3,017,221, unchanged; another section said those closing levels couldn’t be confirmed.

Global Cues and Upcoming Data

Asian stocks rebounded early Wednesday. South Korea’s Kospi rose about 4%, Japan’s Nikkei gained about 1%, and Hong Kong’s Hang Seng barely moved. The dollar index slipped 0.2% to 101.77, while the U.S. 10-year Treasury yield stood at 5.115%. Brent settled at US$108.79 a barrel, down 0.7%, and U.S. crude fell 1.8% to US$101.79.

A softer dollar could help importers and support the Brazilian real and Chilean peso, the report said. It also flagged yields above 5% and oil near US$109 as relevant to the regional market hand-off.

Mexico was due to report August retail sales on Wednesday, with a consensus forecast of 2% year over year, up from 1.8%. Its mid-month inflation reading was due Thursday, Oct. 22, with a 3.6% consensus forecast for the first half of October, compared with 3.42% previously. Those are forecasts, not reported results.

Polymarket traders put the chance of no change at the Federal Reserve’s Oct. 28 meeting at 86.5% at 11:13 p.m. ET on Tuesday, Oct. 20. They gave a 12.5% chance to a 0.25-point increase, with about US$51.4 million traded. The report specified these were trader bets, not central-bank forecasts or polls.