China may have signaled it's going more hard-line on trade, but it could be a good thing, former U.S. negotiator Clete Willems told CNBC.World Economyread more
As China's economic growth declines, some analysts say Beijing may have to spend more on infrastructure, adding to concerns about high debts.China Economyread more
After years of speculation, Neuralink, the brain-machine interface start-up co-founded by Elon Musk, started talking directly to the public on Tuesday.Technologyread more
"The charts, as interpreted by Carley Garner, suggest that the upside in the stock market has gotten more limited," Jim Cramer says.Mad Money with Jim Cramerread more
John Paul Stevens, who served on the Supreme Court for nearly 35 years and became its leading liberal, has died.Politicsread more
A key read on the industry, the Architecture Billings Index, fell into negative territory in June, according to the American Institute for Architects. Inquiries for new...Real Estateread more
The largest U.S. banks are scrutinizing members of the Federal Reserve for any insight into how the central bank will tinker interest rates.Banksread more
Mikaila Ulmer may be just 14 years old, but the Me & the Bees Lemonade founder knows a thing or two about business.Young Successread more
U.S. President Donald Trump said Tuesday that Washington and Beijing have a long way to go on trade, adding that America could place tariffs on an additional $325 billion...Asia Marketsread more
The U.S. and China restarted their trade talks, but signs are showing a comprehensive deal could be a long way off, if it happens at all.Marketsread more
The WTO ruling recognized that the United States had proved that China used state-owned enterprises to subsidize and distort its economy. But the U.S. must accept Chinese...World Economyread more
Jair Bolsonaro's presidential victory in Brazil last year propelled Brazilian stocks to a sharp rally to close out a wild 2018. But the new president has a small time window to push through key reforms.
The iShares MSCI Brazil exchange-traded fund (EWZ), which tracks a basket of Brazilian stocks, jumped 13.25 percent in the fourth quarter. Meanwhile, the iShares MSCI Emerging Markets ETF (EEM) dropped nearly 9 percent in that time period. Brazil's Bovespa index also gained 10.8 percent in the final quarter of 2018.
Global investors cheered Brazilian stocks toward the end of last year amid expectations that Bolsonaro will be able to push through changes to help the country's economy recover from a devastating recession. However, time is of the essence for Bolsonaro if he wants to keep this momentum going.
"The window to pass reform in Brazil is never open for long," said Elizabeth Johnson, a managing director at TS Lombard, in a note Friday. "Sentiment could shift if the administration fails to make headway on pension reform over the next six months, thereby missing this historic opportunity."
Brazil's economy has struggled for growth in recent years. Its economy contracted throughout 2016 before turning around in 2017. However, economic growth has struggled to stay near 1 percent over the past two years and has not broken above 2 percent in about five years.
One key issue hurting the Brazilian economy is the country's pension system. While most public pensions include a minimum retirement age, the Brazilian system pays high replacement rates — the percentage of a worker's pre-retirement income ultimately paid out by a pension program — and does so at a much lower age. Brazil's current retirement age is 60 for men and 55 for women. This has led to a ballooning deficit.
Bolsonaro has a chance to push through this reform and has made it a priority, said Johnson. He has already suggested raising the retirement age to 62 for men and 57 for women. While this proposal is far less ambitious that of former President Michel Temer's, it shows he "understands the challenges ahead," said Johnson.
Temer originally proposed raising the retirement age to 65 for men and 62 for women. Bolsonaro — a former army captain known for making racist and homophobic remarks — rode a wave of anti-establishment sentiment to win last year's election as Brazilian citizens grew tired of rampant government corruption, increasing violence and meandering economic activity.
That momentum has carried into the new year. According to a recent poll by Brazilian pollster Datafolha, 65 percent of Brazilians believe Bolsonaro's government will be good for the country. Brazilian stocks have also started off 2019 strong, with EWZ rising nearly 2 percent through the first four sessions of the year.
"Market sentiment will remain positive for the next six months," said Johnson in another note Monday, adding the chances of pension reform passing this year remain strong. "But if the pension reform debate drags on into the second half of the year, the chances of a meaningful pension reform will decline, which would in turn dampen market enthusiasm."