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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (27915)	1/17/2008 9:42:46 PM
From: Elroy Jetson	Read Replies (1) \| Respond to of 217588

Thanks

To: TobagoJack who wrote (27915)	1/17/2008 9:49:22 PM
From: elmatador	Respond to of 217588

Brazil Stocks May Drop 20% in a U.S. Recession (Update1) By Fabio Alves Jan. 15 (Bloomberg) -- Brazilian stocks may decline as much as 20 percent in the event of a U.S. recession, Citigroup Inc. said in a report. Citigroup strategists including Geoffrey Dennis said investors who foresee a recession in the world's biggest economy should keep their holdings ``underweight'' in Brazilian equities. They estimated the benchmark Bovespa index may slide to as low as 50,000 in a U.S. contraction. The Bovespa, which closed yesterday at 62,187.78, fell 3.7 percent today to 59,907.06. ``The Brazilian equity market appears to be too sanguine to U.S. recession risk,'' Dennis wrote in a note to investors dated yesterday. ``We would expect Brazil to underperform Mexico should the U.S. economy slide into recession over the next few months.'' Before today, the Bovespa had fallen 2.7 percent this year after a gain of 44 percent in 2007. That compares with the Mexican Bolsa's 3.7 percent loss in 2008 after a 13 percent advance last year. ``Mexican equities are also around halfway to discounting a U.S. recession,'' Dennis wrote. The New York-based strategist forecasts the Bolsa would decline to 25,000 if a slump in the world's biggest economy drags down regional markets. Goldman Sachs Group Inc., Morgan Stanley and Merrill Lynch & Co. last week said the U.S. may already be in a recession. Dennis recommended asset allocations for U.S. recession that are ``overweight'' in Chile and Colombia, ``underweight'' in Argentina and ``neutral'' in Mexico and Peru. The strategist predicts a 20 percent to 25 percent decline for Latin American equities overall, in the event of a U.S. recession. The average fall for regional stocks during past recessions has been 40 percent, Dennis wrote. ``This is too bearish this time,'' he said. ``This is a U.S., not an emerging market, event. Regional fundamentals are strongly improved.''