Brazilian stocks, Ambev SA (ADR) (NYSE:ABEV), Itau Unibanco Holding SA (ADR) (NYSE:ITUB), and Banco Bradesco SA (ADR) (NYSE:BBD) are off 0.77%, 4%, and 3.3% respectively as sentiment in all things Brazil remains sharply bearish. Brazil is in its worst economic slump since the Great Depression because of the commodity price meltdown. Not helping matters is today’s news that ratings agency Fitch has downgraded Brazil’s credit to junk status of ‘BB+’ from the previous ‘BBB-‘. Fitch’s downgrade sent the Brazilian real (versus the US dollar) lower by as much as 1.1% in morning trading. A lower real means the dollar profits for the Brazilian companies such as Itau Unibanco Holding SA (ADR) (NYSE:ITUB), Ambev SA (ADR) (NYSE:ABEV), and Banco Bradesco SA (ADR) (NYSE:BBD) will be lower. There could be more bad news ahead as Fitch has an outlook negative rating on Brazil’s debt. Although Brazil will bounce back as commodity prices bounce back in the long run, the short term could still get worse.