Ideas
Faria
Macroeconomista, professor e consultor
3:10
Avoid small caps; prefer large-cap Ibovespa.
High Selic and long-term Brazilian interest rates make small caps the most vulnerable part of the equity market because those companies are domestic and capital-needy. Faria says he has been recommending avoiding small caps for at least two months. The small-cap index is also structurally unfavorable because it tends to receive stocks rejected from the Ibovespa and lose winners that migrate to the Ibovespa, acting like a "série B". In contrast, the Ibovespa is relatively better positioned because it includes commodity exporters such as Petrobras, Vale and Suzano, plus Embraer, WEG, utilities, banks and insurers that are less affected by this domestic rate dynamic.
Faria
Macroeconomista, professor e consultor
3:10
Avoid small caps; prefer large-cap Ibovespa.
High Selic and long-term Brazilian interest rates make small caps the most vulnerable part of the equity market because those companies are domestic and capital-needy. Faria says he has been recommending avoiding small caps for at least two months. The small-cap index is also structurally unfavorable because it tends to receive stocks rejected from the Ibovespa and lose winners that migrate to the Ibovespa, acting like a "série B". In contrast, the Ibovespa is relatively better positioned because it includes commodity exporters such as Petrobras, Vale and Suzano, plus Embraer, WEG, utilities, banks and insurers that are less affected by this domestic rate dynamic.
Faria
Macroeconomista, professor e consultor
7:44
Avoid Brazil and China equities now.
Faria says that right now he does not like either China or Brazil. For Brazil, the macro backdrop of very high interest rates is unattractive, so he prefers internationalizing capital away from these two markets.
Faria
Macroeconomista, professor e consultor
7:49
US equities favored for internationalization.
As an internationalization alternative, Faria says the United States is doing well and he likes it. He notes that buying the S&P 500 when the dollar was around 6.20 produced more than 30% gains, compared with roughly 24% for CDI, so the S&P 500 was a good international allocation.
Faria
Macroeconomista, professor e consultor
7:54
MSCI ex-China ex-US should outperform.
Faria also expects the MSCI index excluding China and excluding the United States to perform well, offering another way to internationalize while avoiding China and the US-only exposure.
Faria
Macroeconomista, professor e consultor
7:57
Hold Selic for high carry premium.
Faria likes two B3 ETFs: the low-volatility ETF ("Livol") and the dividend ETF ("IDIV"). He argues they hold better-quality companies, avoid the structural problem of the small-cap index, and over the long term have outperformed the Ibovespa while providing better downside cushioning.
Faria
Macroeconomista, professor e consultor
14:37
Watch DI28 at 13.75 for equities.
Faria uses a long-term concentration model for DI rates. When the DI yield is below the long-term concentration line, rates are in a downtrend and Brazilian equities tend to rally; when it is above, rates are in an uptrend and he becomes cautious. The model flipped bullish for rates in early March 2025, so he reversed his optimistic equity call. The key level is DI January 2028 at 13.75%. If the market prices more rate cuts and DI28 loses 13.75%, he expects yields to fall and the outlook for Brazilian equities to improve.
This Market Makers video, published August 13, 2026,
features Faria
discussing SMAL11.SA, BOVA11.SA, EWZ, FXI, SPY, ACWX, BOVA11, DIVO11.SA, DI1F28.
7 trade ideas extracted by AI with direction and confidence scoring.
Speakers:
Faria
· Tickers:
SMAL11.SA,
BOVA11.SA,
EWZ,
FXI,
SPY,
ACWX,
BOVA11,
DIVO11.SA,
DI1F28
