Ibovespa Bova11 In The Truckers' Strike (2018) | Stock Market Case Study

In May 2018, Brazil was shaken by a nationwide Truckers' Strike that paralyzed the country's transportation sector, causing significant disruptions to economic activities. This case study focuses on analyzing the impact of the strike on the Brazilian stock market, particularly the Ibovespa ETF stocks, and provides insights into protecting investments and seizing opportunities during market turmoil.


In May 2018, truck drivers across Brazil began an indefinite strike to protest rising fuel prices. This disrupted the transportation of goods and supplies throughout the country.

Initial Stock Market Reaction

In the first few days of the strike, Brazil's stock market saw volatility and declines. The Ibovespa stock index, which tracks the most traded stocks on the B3 exchange, fell over 4% on May 24th alone as the strike raised concerns about supply chain disruptions.

Broader Economic Impact

As the strike dragged on for over a week, its negative impacts rippled through the wider Brazilian economy. Food supply chains were disrupted, ports and airports faced blockades, and some manufacturers had to suspend operations due to lack of inputs. GDP estimates for 2018 were revised down.

Government Intervention

Facing mounting economic pressure, the Brazilian government struck a deal with truckers on May 27th to bring an end to the strike. This included subsidizing diesel prices for 60 days.

Relief Rally

The resolution of the strike provided some relief to markets. The Ibovespa rebounded over 2% on May 28th as supply chain gridlocks began clearing.

Lingering Effects

However, the strike had already taken a toll. Many companies faced lower Q2 revenues and profits due to the disruptions. This weighed on their stock prices in the following months, even as the Ibovespa recovered most of its losses by late 2018.

Lessons Learned

The truckers' strike highlighted Brazil's economic vulnerabilities, particularly its dependence on road transportation. It also exposed the market's sensitivity to such systemic shocks at the time.

The stock market looked like this in this period:

Signs that the Truckers' Strike would affect the market

As the strike gained momentum, news reports highlighted the potential economic impact due to disruptions in the transportation of goods and raw materials.

Companies started issuing warnings about potential production cuts and reduced revenues due to the strike.

Analyst reports and commentaries began highlighting the risks posed by the strike to various sectors, such as manufacturing, retail, and agriculture.

Best time to sell stocks before the market crash

The ideal time to sell Ibovespa ETF stocks would have been in the days leading up to the strike, as the risk became more apparent. However, timing the market perfectly is challenging. A prudent approach would have been to gradually reduce exposure to stocks in sectors heavily reliant on transportation, such as manufacturing and consumer goods, as news of the impending strike emerged.

Rationale: By selling stocks before the strike's full impact, investors could have avoided significant losses as the market reacted negatively to the disruptions caused by the strike. Companies heavily dependent on transportation and logistics were likely to experience the most severe impacts on their operations and profitability.

Best time to buy stocks before the market's full recovery

The best time to buy Ibovespa ETF stocks would have been shortly after the strike ended, around the first week of June 2018, when the market began to stabilize and recover.

Rationale: Once the strike ended and supply chains began to normalize, the market's initial overreaction to the strike's impact would have presented an opportunity to buy stocks at discounted prices. Companies that were temporarily affected by the strike but had strong fundamentals and growth prospects would have been attractive targets for long-term investors.

It's important to note that these recommendations are based on hindsight and may not be applicable to future events.

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