Brazilian payment company StoneCo (NASDAQ:STNE) is soaring on Wednesday, with shares up by more than 11% at 3 p.m. EDT. The fintech has been an especially strong performer in the recent market rebound, rising 43% in the past month alone, mostly fueled by a stellar earnings report.
There doesn't seem to be any company-specific news behind today's move. Rather, the gradual reopening of Brazil's economy is starting far sooner than many had expected.
Despite a continuing rise in COVID-19 cases, Brazil is allowing non-essential businesses to open this week in Rio de Janeiro. This is the first of six reopening phases, but given the recent coronavirus trends, could still be a positive surprise to many investors. What's more, Rio de Janeiro mayor Marcelo Crivella said he expects the city to return to normal life by early August.
Prior to the COVID-19 pandemic (specifically, through March 15), StoneCo's total payment volume was up 52% year over year, which was actually an acceleration over 2019's growth rate for the same period. The fintech's growth rate has slowed considerably since then -- payment volume was up by 23% in May.
To be sure, 23% year-over-year growth in the middle of a global pandemic is still impressive. But the sooner Brazil's economy gets back to normal, the sooner StoneCo could (hopefully) get back to the 50%+ growth rate we saw earlier in 2020, and that's what seems to be driving the stock higher.