Wall Street’s biggest bank is telling clients that a win by the son of Brazil’s former far-right president could send Brazilian stocks up 20% by the end of the year.
Story Snapshot
- A Goldman Sachs survey of 70 global investors found half expect at least 20% upside in Brazil’s main stock fund if Flávio Bolsonaro beats President Luiz Inácio Lula da Silva.
- Brazilian markets have surged before after right-leaning election results, including a sharp 2018 rally when Jair Bolsonaro won.
- Markets also rallied after Lula’s 2022 win, showing election bets don’t always follow a simple left-loses, right-wins pattern.
- Flávio Bolsonaro faces investigations for corruption, money laundering and tax evasion, complicating the “market-friendly” label.
- Academic researchers say Brazilian elections usually bring more volatility, not guaranteed one-direction stock gains.
Goldman Survey Signals Big Money Betting On Election Outcome
A new Goldman Sachs survey of 70 global investors found that half see at least 20% upside in EWZ, the U.S.-listed Brazil stock fund, by year-end if Flávio Bolsonaro beats Lula. The survey also found stocks remain the least-owned asset class among these investors right now, suggesting many are waiting on the sidelines until the October election settles the direction of Brazil’s economic policy.
The bet reflects a long-running belief on trading desks that a Bolsonaro-aligned government would cut spending, sell off state assets and calm investors worried about Brazil’s growing debt. That view has deep roots. When Jair Bolsonaro won the first round of the 2018 election, foreign funds poured back into Brazil and the MSCI Brazil index jumped 17% in dollar terms over three weeks.
History Shows Elections Don’t Always Move Markets One Way
But Brazil’s market history isn’t as simple as “right wins, stocks rise.” When Lula won the presidency in 2022, Brazil’s currency and main stock index rallied too, in a volatile trading session right after the results came in. Traders said hopes for a smooth transition of power, not the winning candidate’s politics, drove that bounce.
That pattern challenges the idea that a Bolsonaro win is the only path to a rally. It also raises a fair question for investors chasing this year’s trade: is the market betting on policy change, or just betting that uncertainty will finally end once votes are counted?
Corruption Investigations Cloud The Market-Friendly Label
Flávio Bolsonaro’s own record complicates the tidy “market hero” story some traders are telling. He is currently under investigation for corruption, money laundering and tax evasion, according to reporting tied to recent Lula campaign rallies. Supporters at those rallies described Lula as a defender of Brazilian democracy, framing the race as bigger than fiscal policy alone.
Meanwhile, Reuters reported in August that analysts see the two candidates offering very different politics but landing on similar fiscal outcomes, with markets skeptical either man can quickly fix Brazil’s debt trajectory. That undercuts the idea of a clean, guaranteed market verdict either way.
Researchers Warn Against Treating The Trade As A Sure Bet
Academic studies of Brazilian elections generally find that campaign season brings more price swings and volatility, not steady one-direction gains tied to a single candidate. Researchers studying past cycles note that political uncertainty tends to raise the cost of borrowing and stock volatility broadly, regardless of who eventually wins.
🚨 GOLDMAN CLIENTS SEE 20% BRAZIL STOCK RALLY IF BOLSONARO DEFEATS SOCIALIST IN ELECTION; FOREIGN CAPITAL RETURNS TO BRAZIL
— Blockchain Daily News (@blckchaindaily) September 20, 2026
Prediction markets are also sending mixed signals. Polymarket bettors currently price Lula’s reelection chances at roughly 62%, far ahead of Bolsonaro, even as polls show a tightening race. That gap between betting markets and the Goldman survey’s optimism shows just how uncertain this election remains for anyone trying to profit from it.
For everyday Americans and Brazilians watching from outside the trading floors, the episode is a reminder that big financial institutions are already pricing in political outcomes months before voters decide anything. Whether that counts as smart forecasting or a self-fulfilling bet placed by the world’s wealthiest investors is likely to stay an open question through October’s vote.
Sources:
zerohedge.com, riotimesonline.com, citywire.com, morningstar.co.uk, peio.me, home.saxo, valorinternational.globo.com
