Why did the stock market go up again? Bolsonaro’s retreat is not the only reason

The financial market reacted positively on Monday (13), after sharp falls in recent days, provoked by undemocratic speeches by President Jair Bolsonaro (no party) during the September 7 demonstrations, and by the prospect of a truck driver strike .

In this Monday’s session (13), the Ibovespa, the main index of the Brazilian stock exchange, rose by more than 2.30% and closed the day with an appreciation of 1.85%, returning to 116 thousand points. Experts heard by UOL they highlight the factors that made the market rise again and say that there is more to be celebrated by investors than the president’s change in posture. Understand below if the Stock Exchange entered a new high moment.

President’s retreat improves market ‘mood’

For Heloise Sanchez, an analyst at Terra Investimentos, the market understood as a solid posture of the president the retreat in relation to aggressions against the Judiciary, carried out during the acts of September 7th. The analyst says that this retreat “benefits all Brazilians, and helps improve the mood of the market.”

She also claims that Bolsonaro’s letter, published last Thursday (9), was added to the president’s speeches at an agricultural fair in Rio Grande do Sul, on Saturday (11). At the time, the president would have said that the three powers need to be respected, according to the analyst. This contributed to a calmer day at the Stock Exchange this Monday, says Heloise.

Focus on economic agendas

The return to economic agendas also benefited the Exchange, according to Luis Sales, chief strategist gives Guide Investments. He highlights as positive the stance taken by the Minister of Economy, Paulo Guedes, of resuming conversations with the STF and with Congress to resolve the issue of court orders, in particular, in the Senate, “where Covid’s CPI has held a large part of the agenda economic”.

Samuel Cunha, Investment Advisory Economist H3 Invest, he says that the change in the government’s posture, and especially the president’s, pleases the market because it can bring a more favorable environment for voting not only on the precatories, but on the Income Tax reform, which was approved in the Chamber of Deputies and is about to be evaluated in the Senate, where it may encounter greater resistance.

to Roberto Attachment, CEO of Ohmresearch, the appreciation of the Ibovespa is also related to “the failure of the weekend demonstrations”.

He assesses that there is a disengagement in the discussion about the president’s impeachment, which could disrupt the economic environment and bring even more instability to the market.

Calm external scenario contributed to the rise of the Stock Exchange

For specialists, the calm that reigned in international markets in recent days also contributed to the resumption of the Ibovespa.

Last week, concerns in the global scenario revolved around the possible reduction of stimulus by central banks to the technology sector, which caused investors to migrate to more traditional sectors.

“This week, the scenario became more stable, with no news that affected the market in a more positive or negative way, with a tendency towards normalization”, says Cunha, from H3.

On Friday (10), the market had already signaled a recovery, but the worsening of the external scenario caused a drop of almost 1% on the Stock Exchange, until international markets returned to find a calmer sea after five days of decline on the US Stock Exchange.

“Only this good mood abroad has contributed for us to have a more positive feeling for stock exchanges around the world,” he says Pietra Guerra, stock specialist from Clear Broker.

Will the stock market go up again now?

For Attachment, gives Ohmresearch, the investor’s good mood should consolidate in the coming months, but he does not believe that the scenario is as positive as the one at the beginning of the year, mainly due to the increase in inflation and interest rates. “There should be some recovery on the stock exchange, but the economic scenario is complicated and the economy is getting worse,” he says.

For Sales, from Guide Investments, a stronger stock market correction movement from now on goes beyond what he calls Bolsonaro’s “truce”, but depends mainly on advances in economic agendas.

“We think that the bias is positive. The worst, in the sense of the dispute between the powers, seems to have been left behind”, he says.

Heloise Sanchez, from Terra Investimentos, does not include a possible change in the president’s behavior as one of the factors that could harm investments again. For the analyst, protests and impeachment orders are the biggest fears, as well as setbacks in economic reforms.

The perspective for the coming months, according to the analyst, is for the Stock Exchange to return to historical levels. “For the end of 2021, Terra Investimentos maintains the forecast of 135,000 Ibovespa points,” he says.