Domestic assets continue to decline significantly on Wednesday, 8, reflecting the increased perception of institutional risk in the country, after the political acts promoted by the president Jair Bolsonaro at the September 7th. The international scenario is also one of risk aversion and helps to create a negative backdrop for business here.
At 3:50 pm, the dollar in cash was trading at R$5.3001, up 2.38% – at the highest rate of the day, the US currency hit R$5.3096. The Ibovespa, the main index of the B3, the São Paulo Stock Exchange, marked 114,307.06 points, down 3.02%.
After the speech of the president of the Chamber, Arthur Lira (PP-AL), in the early afternoon, which had a one-off effect on business, attention turned to the speech of Luiz Fux, president of the Federal Supreme Court (STF), who, in a harsh tone, emphasized that contempt for court decisions by the government constitutes a crime of responsibility . During the minister’s speech, the Ibovespa dropped by 3.13%.
Lira ignored Jair Bolsonaro’s threats to the STF and made a speech advocating “enough” of tensions between the Executive and the Judiciary. In yet another sign that he still does not see reasons to organize an impeachment process against the president, he stated that “the main commitment” of the country is scheduled for October 2022, in reference to the elections.
In yet another development of the 7th of September, the National Council for Road Cargo Transport (CNTRC), an entity that brings together truck drivers’ associations, filed a public civil action in the 20th Federal Civil Court of the Federal District against the Union, the president Bolsonaro and his supporters in the wake of Tuesday’s demonstrations. The onslaught has the support of the Parliamentary Front of Truck Drivers and CET drivers. The CNTRC argues that the Poconarista base used the category to garner political support for pro-government acts. The entity seeks compensation of R$ 50 million for property, off-balance sheet and collective moral damages.
The fall is practically widespread among shares on B3, with investors seeking defensive positions in the face of fears that the crisis will bring more adverse economic effects for the country. Eletrobras’ PNB and ON shares led the Ibovespa’s falls, with respective losses of 7.19% and 7.09%. “Any action that is dependent on voting or some agreement between the Chamber, Senate and the presidency suffers greater falls, due to the risk of harming the privatization process. There is greater expectation of volatility in the market”, says Julia Monteiro, an analyst at MyCap.
Shares of retail companies retreat en masse. The sector is affected by the prospect of rising interest rates, with the prospect of rising inflation and unemployment. “The political noises, speeches of the heads of Powers follow today and, with that, increased the stress of future interest (DIs) once again, together with the dollar gaining value against the real”, points out Bruno Madruga, head of variable income of Monte Bravo.
Méliuz’s ON shares (strongly linked to retail activities) led the Ibovespa’s losses, down 7.64%. Via ON shares transferred 7.14%, Americanas ON, 7.11%, GPA ON, 6.98% and Lojas Americanas PN, 5.81%. In addition, Magazine Luiza ON fell 3.64% and Lojas Renner ON, 3.50%.
Abroad, the concern is with the greater difficulty of economic recovery in the world – the possibility of reducing monetary stimuli from central banks is also on the radar. New York Federal Reserve Chairman John Williams said Wednesday that there is a significant improvement in the US economy, but there are also some setbacks.
Also in the United States, the passage of hurricane Ida continues to affect oil production in the country and the commodity rises. Nearly 80% of US oil and gas production in the Gulf of Mexico remains at a standstill, nearly ten days after the hurricane hit Louisiana, with companies scrambling to restart work on offshore platforms. Ida is on course to become the most destructive storm for offshore production in the country in over 15 years.