The iShares MSCI Brazil Index (EWZ), an exchange-traded fund (ETF) that was the topic of the popular “Buy, Sell or Hold” feature on Monday, surged as much as 31% in the first three days of this week. The shares, which closed Friday at $29.94, traded as high as $37.25 in late afternoon trading yesterday (Wednesday) – at that point representing an aggregate gain of 31% in the week’s first three days. The ETF ended yesterday’s trading session at $35.89, an increase of $2.31 per share, or 6.88% for the day. At that closing price, EWZ shares had logged a gain of $4.05 a share, or 14%, since Money Morning Contributing Editor Horacio Marquez recommended the ETF in his Monday column. Marquez is also the editor of the newly created Money Moves Alert trading service....

Like most other markets, Brazil has been battered by the credit crisis – the BOVESPA index is currently down 28% in October alone and no less than 52% from its peak as recently as May. It now appears to represent excellent value, with a historic Price/Earnings (P/E) ratio of only7.0. But are Brazil’s prospects good enough to justify investing there? Brazil was included in the “BRIC” (Brazil, Russia, India and China) group of rapidly emerging markets that Goldman Sachs Group Inc. (GS) created in 2003. At that time the country didn’t deserve the distinction. Long-term growth since the 1970s had averaged less than 2% per capita, and the country had barely avoided bankruptcy in 2002. Every time the world had experienced a credit crunch, Brazil had been caught up in it, chiefly because of the country’s enormous international debt ...

Brazil's inflation continues to fall back steadily. Brazil's mid-month inflation rate fell in September to its lowest level since last March, increasing speculation the central bank will take its time before deciding on future interest-rate increases. Consumer price inflation as measured by the benchmark IPCA- 15 index slowed for a third consecutive month to 0.26 percent, from 0.35 percent by mid-August, according to the latest data from the national statistics agency.The annual inflation rate fell back to 6.2 percent from 6.23 percent at the end of August. The annual rate has now been reducing slowly but steadily since the July peak.Inflation on non-food items accelerated to 0.41 percent in September, from 0.38 percent last month, the IPCA report said. The pressure on prices from strong demand was offset by a 0.25 percent drop in food prices, which compared ...

The rate of increase in Brazil's retail sales accelerated again in July, indicating t that sustained domestic demand may well allow Latin America's largest economy to weather the fall in commodity prices rather better than expected. Retail sales were up an inflation corrected 11 percent in July, following a revised 8.2 percent increase in June. Sales rose in June at the slowest pace in 14 months, according to data from the national statistics agency. Evidently domestic demand is still robust and four central bank interest rate increases since April have far from throttled Brazilian domestic demand, which had been contributing to the upward movement in annual inflation - to around 6.5% - well above the mid-point of the central bank's target range (4.5 percent plus or minus 2 percentage points), but still significantly below the levels seen ...

Brazil's central bank raised its benchmark interest rate three-quarters of a percentage point yesterday. Three of the eight directors expressed the view thatthe raise was excessive, which seems to indicate that the monetary tightening process may be nearing its close in this cycle. Policy makers voted 5-3 to raised the so-called Selic rate a fourth time since April to 13.75 percent from 13 percent in an attempt to keep a tight grip on inflation, and to confirm the Banks growing reputation as the "Bundesbank of Latin America". The decision raised Brazil's real interest rate - which is the nominal rate adjusted for the 6.17% CPI inflation -  to 7.58, the highest among emerging and developed economies alike. The dissenters on the board voted for a half-point increase.Real DeclineDespite the interest rate rise the real fell ...

Brazil's broadest measure of inflation fell in August for the first time in more than two years, led by a larger-than-forecast drop in food prices. Consumer, construction and wholesale prices, as measured by the IGP-M price index, decreased 0.32 percent when compared with July. The country's benchmark index for consumer prices showed a 6.23 percent increase for the 12 months through mid-August, the central bank said last week. Today's report obviously doesn't mean that the central bank should ease up on its bid to contain inflation by raising interest rates, but it is, nonetheless, welcome news. Policy makers have raised interest rates three times since April, to 13 percent from a record low 11.25 percent, to slow inflation running near the 6.5 percent upper limit of its target range. Policy makers, led by bank President Henrique Meirelles, are still expected to raise the ...

Brazil's inflation through mid- August slowed for the second consecutive month, bolstering confidence that the central bank will bring consumer prices back to target next year. Brazil's inflation rate as measured by the benchmark IPCA-15 index decreased to a monthly 0.35 percent from a monthly 0.63 percent through mid- July as food prices eased, the national statistics agency said today. Today's report showed that the annual inflation rate for the 12 months through mid-August slowed to 6.23 percent from 6.30 percent in mid-July. Month-on-Month food prices rose 0.25 percent, compared to 1.75 percent at the mid-July reading. Now we need to wait and see what the central bank decide to do about this.

Brazil's unemployment rate unexpectedly rose to 8.1 percent in July from the previous month, the national statistics agency said today. Unemployment in Brazil's six largest metropolitan areas was up from 7.8 percent in June.This is a surprising number since we saw seasonally adjusted year on year job creation of 184,000 in July, down from the even higher 250,000 registered in June, but still pretty healthy I would have thought, and 3-month average continued to move up from 172,000 to 182,000. In fact on an unadjusted basis Brazil added 203,218 government- registered jobs last month, the best July performance ever. That was a 60 percent over the 126,992 formal jobs created in July 2007, Labor Minister Carlos Lupi said in a statement. Brazil will add a record 2 million new formal jobs in 2008, according to Lupi, compared to his forecast of 1.8 million made at the ...

Brazil's retail sales increased in June at the slowest pace in 14 months as higher interest rates and faster inflation cooled domestic demand. Retail, supermarket and grocery store sales volume rose 8.2 percent in June from a year earlier. The increases follows a revised 11.1 percent jump in May according to data drom the national statistics agency in Rio de Janeiro. Sales rose 1.3 percent from May. Three central bank rate increases since April to bring inflation down from a three-year high are starting to curb household spending and reduce earnings. Inflation accelerated to 6.37 percent in the 12-months through July from an eight-year low of 2.96 percent in March 2007 on higher food prices, cutting into workers' income. Despite the slowdown retail sales in the first six months of 2008 expanded 10.6 percent, the fastest pace since the statistics agency began keeping records in 2001.

The Second of Two Parts. By Martin Hutchinson Contributing Editor Global investors need to “hit the BRICs” – literally. Back in 2003, the Goldman Sachs Group Inc. (GS), eager to push its clients towards global investing – especially in the emerging markets – invented the acronym “BRIC” (Brazil, Russia, India and China) to represent the four emerging markets it believed were destined to become dominant economies in the years to come. And we concur: The BRICs are four markets investors need to carefully consider as places to put some of their money. That’s why we here at Money Morning developed “The BRIC Report,” a new feature in which we’ll periodically update you on the latest developments in each of the BRIC economies and stock markets, and highlight some BRIC-related companies you might want to look at. In Part I of this report, we ...