Brazil 2026 general election: Lula stages a comeback and wins a fourth term

Following Flavio's surprising first-round lead, Lula reacted and won the runoff by a significant margin, defying both polling and prediction-market pricing; higher second-round turnout appears to have been an important contributor to Lula's comeback. With the election decided, three issues matter most: the opposition's stance toward the result after Flavio did not recognize it, the composition of the new administration's economic, political and social teams, and the market response and its feedback into policy. Given markets had priced a materially different outcome, a significant repricing of Brazilian assets is expected when trading resumes Monday. Equities: using the consensus 12-month forward PE (9.7x at Friday close) over the past 10 years in quartiles, Brazil should de-rate to the second-quartile average (8.3x, -14%) and settle between the first and second quartile (7x, -28%), implying roughly a 20% decline over coming days;