Brazil Stocks Just Had One of the Worst Days Ever

The iShares MSCI Brazil ETF closed down 19.8% on Monday after Lula beat Flavio Bolsonaro, the second-largest single-day drop in the fund's history, behind only March 16, 2020. The market is pricing a solvency event, but the data says this is a domestic policy shock that spares the hard-currency exporters.