What happened

Brazil's investors were ebullient today. Shares of Brazilian stocks of all sorts shot out of the gate Tuesday morning along with the broader market, with financial firms Banco Bradesco (NYSE:BBD) and Itau Unibanco (NYSE:ITUB), meat processor BRF (NYSE:BRFS), and oil major Petroleo Brasileiro (NYSE:PBR) (NYSE:PBR.A) all notching gains of roughly 10% or more in early trading.

As of 3:30 p.m. EDT Tuesday, however, Banco Bradesco's gains had been rolled back to 7.6% and Itau Unibanco's win was cut in half to 5.3%. BRF was still up a healthy 7.9%, and Petroleo Brasileiro (Petrobras for short) was holding on to a 9.1% gain. 

Map of Brazil under a magnifying glass

Image source: Getty Images.

So what

None of the four stocks named above had any positive news to report today. And in one case, the news was bad.  

This morning, Reuters reported that coronavirus infections are spreading rapidly in Brazil's offshore oil fields, the very place where Petrobras extracts most of its oil. Indeed, Petrobras is named as one of the primary victims of the outbreak, with 300 workers believed to be infected. In that same article, Reuters also alluded to the problems that meatpacking, BRF's business, has had with containing coronavirus outbreaks in processing plants.  

More broadly, CNN is reporting that Brazil just became the No. 2 source of coronavirus cases worldwide, overtaking Russia for second place behind the U.S. Some 375,000 Brazilians have contracted the virus, CNN said, and more than 23,000 lives have been lost to it.  

Now what

On top of this bad news, Brazil appears to be in the throes of a political crisis. Street demonstrations calling for the resignation of President Jair Bolsonaro over his mishandling of the crisis have provoked counterdemonstrations. In the latest sign of how bad things are getting, Britain's Guardian newspaper reports that Brazilian journalists are boycotting the president in protest over attacks on them (just verbal so far) by the president's supporters in the street.  

With no real news to support the Brazil stock rally today, and plenty of bad news to defeat it, it's no surprise to see Brazilian stocks beginning to fade away here in the afternoon. The only surprise is that the stock rally happened in the first place.