Trading The Globe: Brazil

Brazil's stock market suffered its worst one-day plunge in three months after the government imposed a tax on foreign investments in local stocks and bonds.

Finance Minister Guido Mantega said on Monday the government would charge a 2 percent financial transactions tax on foreign investments in Brazilian stocks and fixed-income securities in a bid to prevent the country's currency from strengthening further. The tax took effect on Tuesday.

On the news, Petrobras and Vale , the two most-widely traded stocks in Brazil, slumped as investors dumped liquid shares. Meanwhile, Brazil's currency, the real (BRBY), tumbled 2.3 percent to 1.752 per dollar as traders fretted about the effects of the tax on short-term dollar inflows.


What must you know?

These events remind us that the rules of the game sometimes change in emerging markets, explains Tim Seymour. I still think Brazil is a great long-term story but it reminds why this is an emerging market.

For long-term investors Brazil is still attractive. Personally, I think events have presented a buying opportunity in stocks such as Vale and Petrobras. However I wouldn’t necessarily jump in immediately.

______________________________________________________
Got something to to say? Send us an e-mail at [e-mail] and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment but not have it published on our website send those e-mails to [e-mail].

Trader disclosure: On Oct. 20th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Finerman's Firm Owns (BAC) Preferred, (BAC) Call Spreads, (BAC); Finerman Owns (BAC) Preferred, (BAC); Finerman's Firm Owns (BKS) Puts, Is Short (BKS); Finerman's Firm Owns (MSFT); Finerman's Firm Owns (TGT); Finerman's Firm Owns (UNH) Calls; Finerman's Firm And Finerman Own (WFC) Preferred; Finerrman's Firm And Finerman Own (WMT); Finerman's Firm Is Short (UNG), (IJR), (MDY), (SPY), (IWM), (USO); Finerman Owns (AAPL); Najarian Owns (BX) Call Spread; Najarian Owns (GE) Calls; Najarian Owns (LAZ), Is Short (LAZ) Call, Owns (LAZ) Puts; Najarian Owns (MGM) Calls; Najarian Owns (STX) Call Spread; Najarian Owns (XLF) Call Spread; Najarian Owns (YHOO), Is Short (YHOO) Calls; Najarian Owns (TEX) Call Spread; Finerman's Firm And Finerman Own (FLS); Finerman's Firm Owns (DRI); Seygem Asset Managemnet Is Short (PBR); Seygem Asset Management Is Short (EWZ); Seymour Owns (CHL), (EWZ), (AAPL), (BAC), (CAT), (MGM)

GE Is The Parent Company Of CNBC

For Chris Mutascio
Stifel, Nicolaus & Co. Expects To Receive/Seek Investment Banking Compensation From (BBT) In Next 3 Months
Stifel, Nicolaus & Co. Expects To Receive/Seek Investment Banking Compensation From (BOH) In Next 3 Months
Stifel, Nicolaus & Co. Expects To Receive/Seek Investment Banking Compensation From (CMA) In Next 3 Months
Stifel, Nicolaus & Co. Is A Market Maker In (COBZ)
Stifel, Nicolaus & Co. Expects To Receive/Seek Investment Banking Compensation From (COBZ) In Next 3 Months
Stifel, Nicolaus & Co. Is A Market Maker In (CVBF)
Stifel, Nicolaus & Co. Expects To Receive/Seek Investment Banking Compensation From (CVBF) In Next 3 Months
Stifel, Nicolaus & Co. Expects To Receive/Seek Investment Banking
Compensation From (CYN) In Next 3 Months
Stifel, Nicolaus & Co. Or Affiliate Provides Or Provided In Past 12 Months Non-Investment Banking, Securities Related Services To (CYN)
(CYN) Is Or In Past 12 Months Was A Client Of Stifel, Nicolaus & Co. Or Affiliate
Stifel, Nicolaus & Co. Or Affiliate Has In Past 12 Months Received Compensation
For Non-Investment Banking, Securities Related Services From (CYN)
Stifel, Nicolaus & Co. Is A Market Maker In (FITB)
Stifel, Nicolaus & Co. Expects To Receive/Seek Investment Banking Compensation From (FITB) In Next 3 Months
Stifel, Nicolaus & Co. Is A Market Maker In (GBCI)
Stifel, Nicolaus & Co. Expects To Receive/Seek Investment Banking Compensation From (GBCI) In Next 3 Months
Stifel, Nicolaus & Co. Expects To Receive/Seek Investment Banking Compensation From (KEY) In Next 3 Months
Stifel, Nicolaus & Co. Or Affiliate Provides Or Provided In Past 12 Months Non-Investmet Banking, Securities Related Services To (PNC)
(PNC) Is Or In Past 12 Months Was A Client Of Stifel, Nicolaus & Co. Or Affiliate
Stifel, Nicolaus & Co. Or Affiliate Has Received Compensation For Non
Investment Banking, Securities Related Services From (PNC) In Past 12 Months
Stifel, Nicolaus & Co. Expects To Receive/Seek Investment Banking Compensation From (RF) In Next 3 Months
Stifel, Nicolaus & Co. Expects To Receive/Seek Investment Banking Compensation From (STI) In Next 3 Months
Stifel, Nicolaus & Co. Is A Market Maker In (UMPQ)
Stifel, Nicolaus & Co. Expects To Receive/Seek Investment Banking Compensation From (UMPQ) In Next 3 Months
Stifel, Nicolaus & Co. Expects To Receive/Seek Investment Banking
Compensation From (USB) In Next 3 Months
Stifel, Nicolaus & Co. Is A Market Maker In (WABC)
Stifel, Nicolaus & Co. Expects To Receive/Seek Investment Banking
Compensation From (WABC) In Next 3 Months
Stifel, Nicolaus & Co. Or Affiliate Has Received Investment Banking
Compensation From (WFC) In Past 12 Months
Stifel, Nicolaus & Co. Expects To Receive/Seek Investment Banking
Compensation From (WFC) In Next 3 Months
Stifel, Nicolaus & Co. Or Affiliate Provides Or In Past 12 Months Provided
Investment Banking Services To (WFC)
(WFC) Is Or In Past 12 Months Was A Client Of Stifel, Nicolaus & Co. Or Affiliate
Stifel Nicolaus Maintains A Business Relationship With (WFC)
Stifel, Nicolaus & Co. Is A Market Maker In (WFSL)
Stifel, Nicolaus & Co. Expects To Receive/Seek Investment Banking
Compensation From (WFSL) In Next 3 Months
Stifel, Nicolaus & Co. Is A Market Maker In (ZION)
Stifel, Nicolaus & Co. Expects To Receive/Seek Investment Banking Compensation From (ZION) In Next 3 Months

CNBC.com with wires