Why Is NU Stock Surging Nearly 9% In Overnight Trading?

• According to Reuters, Bolsonaro beat expectations in Sunday’s first-round presidential election, landing about 47% of the votes as he moves to an Oct. 25 runoff election against Lula. 
• Bolsonaro's campaign has said its proposals will strengthen fiscal discipline, improve public-sector efficiency, and create conditions for stronger economic growth.
• Nu Holdings also said last week that it is not pursuing a deal for Britain’s Monzo.

Shares of Nu Holdings Ltd. (NU) are rising overnight after right-wing Brazilian Senator Flávio Bolsonaro looks likely to beat leftist Luiz Inácio Lula da Silva in the upcoming elections. 

According to a Reuters report, Bolsonaro beat expectations in Sunday’s first-round presidential election, landing about 47% of the votes as he moves to an Oct. 25 runoff election against Lula. 

How Does This Matter To Nubank?

Bolsonaro’s policies focus on tighter fiscal policy, lower taxes, and potentially lower long-term interest rates, which are seen as improving Brazil's business environment, stock market, and the Brazilian Real. 

Bolsonaro's campaign has said its proposals will strengthen fiscal discipline, improve public-sector efficiency, and create conditions for stronger economic growth. 

Marco Saravalle, chief investment officer at MSX Invest/Krivo Capital, told Reuters that if Bolsonaro is elected, it could help pass major economic ​reforms, institute a "more well-behaved fiscal policy" and boost ⁠growth in Brazil. 

NU Stock Also Benefits From Monzo Deal Denial 

The stock also got a boost last week after Nu Holdings declared that it is not pursuing a deal for Britain’s Monzo. In a filing with the Securities and Exchange Commission, the Latin American financial company said that it "is not pursuing a transaction with Monzo,” adding that it remains focused on strengthening its position in Brazil, growing its businesses in Mexico and Colombia, and building presence in the United States and globally. 

Earlier last week, Sky News reported that Monzo and Nu Holdings were in early talks to acquire the British digital bank for a potential price of £8 billion to £10 billion, or about $10.6 billion to $13.3 billion. Shares declined after the announcement. 

NU Stock: Retail Stance

On Stocktwits, retail sentiment around NU stock slipped from ‘extremely bullish’ to ‘bullish’ over 24 hours, while message volume climbed 200% in the same period, according to platform data. 

One user said, “$NU short squeeze coming and many banks about to have blowout earnings.” Nu Holdings will report its third quarter (Q3) results on Nov. 12. 

Another user said, “$NU stocks up 5-10% on some presidential news thing in Brazil,” adding that they are going to sell at a profit, and that it is a “great company.”

NU stock is down more than 21% this year. 

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