Halister News

(Bloomberg) -- The iShares MSCI Brazil Capped ETF (EWZ) plunges 16% pre-market on reports President Michel Temer is mired in an alleged cover-up scheme, the latest development in the three-year long investigation known as Operation Carwash.

• Seeing pre-market weakness in Brazil ADRs that trade in the U.S.: Petrobras (PBR) -18%, Banco Bradesco (BBD) -16%, Vale (VALE) -13%, Embraer (ERJ) -7.1%; also note LatAm Airlines (LTM) received an unrelated downgrade by Morgan Stanley
• Also watch U.S. stocks with exposure to Brazil: MercadoLibre (MELI; Brazil accounted for ~54% of total rev. in 2016, according to Bloomberg data), Mosaic (MOS; ~30% of rev.), AES (AES; ~28% of rev.), Bunge (BG; ~16% of rev.), Monsanto (MON; ~11% of rev.)
• European blue chips with exposure to Brazil, such as Santander, Casino and AB InBev, sold off in overseas trading

RELATED

• Brazil Assets Sink as Temer Furor Adds to Trump-Fueled Selloff
• Quick Guide to Brazil Futures Markets Ahead of Expected Turmoil
• How Brazil’s New Political Crisis Might Play Out: QuickTake Q&A

To contact the reporter on this story: Arie Shapira in New York at ashapira3@bloomberg.net To contact the editors responsible for this story: Chris Nagi at chrisnagi@bloomberg.net Brad Olesen