Decent news from the Brazilian oil giant, but there are a few key thoughts to take away from this earnings report and the reaction to it. First, PBR ( quote ) has been the most defensive stock in Brazil -- a market that has been crushed -- because of the oil price. But having said that, part of the crush was due to the fund flows back into emerging markets after the first quarter flush out. Large-cap names like PBR held up best in that move and now look most vulnerable if the selling continues -- and there are people out there like me who believe emerging markets are technically poised for an even bigger pullback than we have seen. Getting back to PBR, no real surprises in the number. Capex looks much lighter than the forecast -- and this has potentially huge implications for oil service bets on the region. Names like Pride International ( PDE , quote ), SeaDrill ( SDRL , quote ) and Diamond Offshore ( DO , quote ) have been big beneficiaries of the PBR money machine. If that slows, look out. EBITDA of $9.7 billion was in line. No surprises there.