Brazil Daily Briefing

Nu at -5.7% is exactly what happens to high-multiple fintech growth stocks when the US risk-free rate breaks 5%+. Nu trades at ~50x forward earnings — its valuation depends heavily on a lower discount rate and continued user monetization improvements. When the 30-year moves, Nu moves faster and harder than Itaú or Bradesco (which have lower multiples). The fintech-vs-incumbent dynamic showed a decisive reversal today: ITUB -3.2% but Nu -5.7% — the premium on high-growth fintech is the first to compress in a rate-repricing move. Watch whether Nu can recover above $13 — below $12 is structural bear territory.

PBR's +0.8% was Brazil's lone bright spot, driven by the same crude oil supply scare that lifted XOM and CVX in the US session. Brent's surge on prolonged supply disruption concerns provides direct per-barrel revenue relief for Petrobras. For IBOV index-trackers: PBR is roughly 10% of the Bovespa by weight, so its positive contribution materially limited what could have been a -3.5%+ session. The elevated Selic rate constrains Petrobras's domestic debt rollover costs — any BCB easing is net positive for PBR beyond the crude price tailwind.

SQM (Sociedad Química y Minera de Chile) is the LatAm proxy for global lithium demand — and today's -2.9% signals continued lithium price softness. Chinese EV makers are reporting slowing growth, and the 2024-25 lithium glut is yet to fully clear. For Brazil, SQM's decline reflects the broader EM materials complex risk-off. Vale's iron ore exposure faces similar China demand headwinds. The 'Brazil as commodity exporter' thesis is under pressure from both the lithium side (SQM proxy) and the iron ore side.