As far back as the early 2000s, investors started falling in love with the "BRICS"... The initial acronym focused on Brazil, Russia, India, and China. And as time passed, this group expanded to include South Africa and other countries.
This Forgotten 'BRICS' Member Is Soaring
By Joe Austin, senior analyst, Chaikin Analytics
As far back as the early 2000s, investors started falling in love with the "BRICS"...
The initial acronym focused on Brazil, Russia, India, and China. And as time passed, this group expanded to include South Africa and other countries.
In the beginning, the idea was simple...
These emerging markets would soon make a lot of money for investors.
After all, millions of "first world" consumers in the making live in these countries. As their quality of life increases, so will their spending.
It's a virtuous cycle. But it takes time. And not every country moves at the same speed.
Not surprisingly, investors moved on from this theme. Folks are always chasing some hot new acronym in the markets. But that doesn't mean the BRICS story ended.
In fact, I have my eye on one of these markets that's soaring right now...
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A Big Shift in Brazilian Stocks
I'm talking about Brazil.
The country has climbed the global ladder in a big way over the past decade or so...
It's now the world's ninth-largest economy in terms of gross domestic product. It's also the largest economy in both Latin America and the Southern Hemisphere.
Brazil hasn't been in this position for long, though. It's still emerging as a world power.
The country didn't transition back to democracy until 1985. Its constitution has only been in place since 1988. And it continues to deal with political turmoil and corruption to this day.
But importantly for us as investors... Brazil's economy is booming over the longer term.
We can see that with the iShares MSCI Brazil Fund (EWZ). As the name implies, it's an exchange-traded fund ("ETF") that holds a basket of Brazilian stocks.
Over the past five years, EWZ has lost nearly 10%. That's terrible compared with the S&P 500 Index's roughly 92% gain over the same time frame.
But now, we're seeing an interesting reversal. Take a look at this chart of EWZ with some data from the Power Gauge...
To be clear, the Power Gauge still rates EWZ as "neutral" right now. But that rating might not last...
Since the start of the year, Brazilian stocks have soared about 22%. That crushes the S&P 500's roughly 2% gain in 2025.
That strong performance makes sense when you dig into what has been happening on the ground there...
Brazil's employment rates have soared over the past several years. Unemployment is down from its COVID-19 pandemic high of nearly 15% to around 7% as of this past March.
The bulk of Brazilian exports are raw materials and agricultural products...
Your morning coffee is likely from Brazil, for example. The country grows and processes a quarter of the world's coffee.
Brazil is the world's largest exporter of soybeans, too. Its top exports also include raw sugar and corn.
But that said, the "trade war" isn't a big deal for Brazil...
Brazil's largest trade partner is China. More than a quarter of Brazil's exported goods go to that country.
Meanwhile, Brazil is the U.S.'s 16th-largest trade partner. And the U.S. runs a trade surplus with the country. That means Americans sell more goods to Brazilians than we buy from them.
The ongoing uncertainty from U.S. tariffs won't hurt Brazil's economy too much.
Brazil's growing consumer class is another key part of the story...
Urbanization in Brazil means more densely concentrated economic activity. As that shift plays out, the country's businesses need to meet the growing consumer demand.
Now, consumer spending is soaring in the country...
Brazilian consumers spent around $550 billion per year in the late 1990s. In recent years, that number has rocketed to roughly $1.4 trillion.
When you put it all together, it's obvious that there's still opportunity here. Business is booming as Brazil's consumer class grows. And the country is shielded from the trade war.
Again, the Power Gauge hasn't flipped into "bullish" territory for EWZ yet. But if you, like many investors, forgot about this BRICS member... it's time to start paying attention to it again.
Keep an eye on Brazilian stocks.
Good investing,
Joe Austin
Market View
Major Indexes and Notable Sectors
# Hld: Bullish Neutral Bearish
Dow 30
-0.25%
5
19
6
S&P 500
-0.03%
87
265
147
Nasdaq
+0.28%
24
60
16
Small Caps
-0.28%
418
1053
412
Bonds
+1.62%
— According to the Chaikin Power Bar, Small Cap stocks have become somewhat more Bullish than Large Cap stocks. Major indexes are mixed.
* * * *
Sector Tracker
Sector movement over the last 5 days
Materials
+2.4%
Information Technology
+2.4%
Health Care
+1.38%
Real Estate
+1.11%
Industrials
+0.86%
Consumer Staples
+0.54%
Utilities
+0.53%
Communication
+0.45%
Financial
+0.4%
Energy
+0.37%
Consumer Discretionary
-0.0%
* * * *
Industry Focus
Innovative Technology Services
41
45
9
Over the past 6 months, the Innovative Technology subsector (XITK) has underperformed the S&P 500 by -0.81%. However, its Power Bar ratio, which measures future potential, is Very Strong, with more Bullish than Bearish stocks. It is currently ranked #6 of 21 subsectors and has moved down 1 slot over the past week.
Top Stocks
ACLS
Axcelis Technologies
ACMR
ACM Research, Inc.
AMPL
Amplitude, Inc.
* * * *
Top Movers
Gainers
ON
+6.14%
NXPI
+5.56%
ALB
+4.72%
DHI
+4.38%
CMG
+4.17%
Losers
DLTR
-8.37%
CRWD
-5.77%
CEG
-4.31%
TSLA
-3.55%
VLO
-3.37%
* * * *
Earnings Report
Earnings Surprises
MDB MongoDB, Inc.
Q1
$1.00
Beat by $0.34
DLTR Dollar Tree, Inc.
Q1
$1.26
Beat by $0.05
CXM Sprinklr, Inc.
Q1
$0.12
Beat by $0.02
* * * *
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