Brazil Daily Briefing

Money Times reported that Itaú Unibanco (ITUB4) posted Q3 2026 recurrent net profit of R$12.6 billion, with return on equity of 23.6% — both beating consensus estimates. The result confirms Itaú as Brazil's most profitable large bank by margin, yet the stock lagged on the day alongside the broader Banks sector (-0.99%). The disconnect between strong earnings fundamentals and weak stock performance signals that macro risk (Selic trajectory, fiscal policy) is dominating the valuation narrative.

Money Times reported that Bradesco (BBDC4) has fallen nearly 40% from its pre-election peak since Lula's re-election victory, reflecting market concern about the bank's exposure to fiscal and regulatory risk under the new mandate. The same report noted that Morgan Stanley has reportedly been evaluating the discount — suggesting that at these levels, global value hunters are looking. A -40% drawdown in a large-cap bank creates a potential 'catch-up' trade if fiscal policy stabilises.

Money Times reported the Bovespa's sixth straight session of losses, attributing the decline to worsening domestic macroeconomic conditions and BRL weakness. The six-session streak reflects compounding pressures: oil's 7% decline hit Petrobras (Energy -1.10%), corn's four-month low in Chicago weighs on agri-linked names, and consumer spending softness hits the domestic-facing Consumer sector (-1.86%). For Fintech: Nu (+1.81%) and digital peers are capturing the savings rotation that traditional banks are losing.