After warning of the market downdraft in May, I have been cautious about re-entry, stressing dividend yields and stability over growth.

Meanwhile value stocks continue to appreciate on news of potential takeovers. This includes retail stocks such as Brazil's largest retailer, Companhia Brasileira de Distribuicao Grupo Pao de Acucar (CBD). Rallye SA (RAL.FR), which controls France's No. 3 retailer by sales, Groupe Casino SA (CO.FR), last week announced it has raised its aggregate stake in CBD to 48.1%.

Here are some other economic and business trend highlights from Latin America.

Despite economic weakness in the United States and Europe, Brazil posted a gain in exports in September that helped it achieve a trade surplus of $3 billion for the month, nearly triple the $1.1 billion for the same month last year, according to Brazil’s trade ministry. The inflation rate in Brazil jumped to an annualized pace of 7.31% in September.

In Mexico, a survey of economists by Citigroup’s Banamex group estimated that the nation’s GDP will advance 3.8% this year and that Mexico’s central bank’s next interest rate move will be a 25-basis-point reduction in its benchmark rate, with no further changes until October of next year. The economists forecast overall 3.4% inflation for 2011.

Tumbling copper prices narrowed Chile’s trade balance in September. The monthly surplus totaled $324 billion and the overall economy advanced at a 6.8% rate in the second quarter.

The Inter-American Development Bank (IDB) predicted that Peru's economy would grow between 6% and 6.5% this year – one of the highest growth rates in Latin America. Fidel Jaramillo, IDB’s representative in Peru was quoted as saying "Growth prospects remain favorable for Latin America in general, and especially for Peru." Peru’s benchmark overnight interest rate was left unchanged at 4.25% by the nation’s central bank for a fifth consecutive month.

Read more in the attached weekly update and ...

Happy trading this week!

Rudy

The market-leading stocks during this recovery week in Latin America included:

• Net Servicos de Comunicacao SA (NYSE:NETC) +20.1%
• GOL Linhas Aereas Inteligentes S.A (NYSE:GOL) +14.9%
• Repsol YPF, S.A. (NYSE:REPYY) +10.5%
• Companhia Brasileira de Distribuicao +10.4%
• Rio Tinto plc (NYSE:RIO) +10.3%
• Data date: 10/07/11