Ibovespa rises with recovery of stock exchanges abroad; oil renews highs in seven years

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SAO PAULO – The Ibovespa has established a position in positive territory while the international market is experiencing a truce, after the stock exchanges tumbled in yesterday’s session. The day’s indicators, however, still inspire distrust, as they reinforce the scenario of “stagflation” – rising inflation, with a stagnant economy. Oil prices on the international market reach the highest level in seven years, putting additional pressure on this price hike.

“In economics, markets are improving a bit today, but risk aversion continues, given multiple global risks, ranging from debt problems in China’s real estate sector to rising energy prices in Europe and reduced monetary stimulus in the US” , highlights the XP.

Here in Brazil the industrial production data came out, with a drop of 0.7% in August compared to July, worse than expected and the third fall in a row. During this period, there was an accumulated loss of 2.3%. The data were released this Tuesday (5) by the Brazilian Institute of Geography and Statistics (IBGE). Analysts believe the performance should directly impact third-quarter GDP and force a round of growth revisions for the year.

At the end of the morning, the Senate approved invitations for Economy Minister Paulo Guedes and Central Bank President Roberto Campos Neto to explain their investments in offshore (companies incorporated abroad).

Guedes and Campos Neto may also be investigated by the Attorney General’s Office (PGR). The PGR said on Monday that it will open preliminary investigations to investigate offshores linked to both, cited in reports of the “Pandora Papers” case.

One of the questions to be verified is whether they, in theory, would have any limitation due to the positions they occupy to maintain these accounts, informed the PGR.

A leak of financial documents published by various news organizations on Sunday allegedly link leaders and officials around the world to funds deposited in tax havens, including Jordan’s King Abdullah, Czech Prime Minister Andrej Babis, and associates of the Russian president , Vladimir Putin, as well as Guedes and Campos Neto.

In the United States, Facebook has publicly apologized after being down for more than six hours, hurting business worldwide. Billions of users were left without access to the social network, Instagram and Whatsapp. The company’s shares closed down nearly 5% in yesterday’s session, but are up again today in the pre-market. Facebook reported that there was an internal configuration error, denied the hypothesis of a cyber attack and ruled out data leakage.

In the US Congress, lawmakers continue to debate the possibility of raising or suspending the US debt limit. Last week, the Treasury Department warned that lawmakers must reach an agreement by Oct. 18. Secretary Janet Yellen said again this morning that if this deadline is not met, the US economy could fall into recession.

“The market is now waiting for the most important data of the week, which will be the payroll, from the US labor market, which leaves on Friday,” recalls Jennie Li, stock strategist at XP. The indicator will say whether the advance of inflation is being accompanied by job creation. If the data disappoints, it could be a sign that the “stagflation” is real.

At 12:30 pm (Brasilia time), the Ibovespa rose 0.90% to 111,388 points.

The commercial dollar rose again, and advanced 0.14%, to R$ 5.454 in purchase and R$ 4.454 in sale. Dollar futures maturing in November 2021 advanced 0.06% to R$5.481.

In the futures interest market, the DI for January 2022 had a slight increase of two basis points, to 7.24%; DI for January 2023 advanced four basis points, at 9.26%; DI for January 2025 was up two basis points at 10.27%; and the DI for January 2027 registered a positive change of two basis points at 10.65%.

In New York, stock exchanges operate at a high. Tech stocks, the most penalized by yesterday’s fall, are back on the rise. With Facebook’s crash, the company is estimated to have lost more than $45 billion in market value in a single day. Just now, shares that closed at $326.23 the day before were already trading above $330.

At 12:34 pm (Eastern time), the Dow Jones was up 1.34%; the S&P 500 advanced 1.43%; and the future Nasdaq had a positive variation of 1.5%.

Stock exchanges in Europe are also taking advantage of the moment of relief in the market and recover part of the losses of the previous day. The Stoxx 600, which brings together companies from 17 European countries in key sectors, fell yesterday to its lowest level in three months, but today it rises 1.18%. The London Stock Exchange (FTSE100) rose 1.02% and Frankfurt (DAX) rose 1%.

Oil prices are rising again this morning, after the Organization of Petroleum Exporting Countries and Allies (OPEC+) maintained the production level for November at 400,000 barrels of oil per day.

The expectation was that the offer would be greater, with concerns that the high price of the raw material would contribute to global inflation and be an obstacle to the post-pandemic economic recovery. Analysts interviewed by CNBC believe prices could reach $100.

Brent’s December 2021 price is now trading above $83. WTI for November 2021 is close to $80.

In Asia, a good part of the stock exchanges closed down, still reflecting the bad results of the indices in the United States the day before.

In Japan, the Nikkei retreated 2.19%; in South Korea, the Kospi retreated 1.89%; in Hong Kong, the Hang Seng Index gained 0.5%. In mainland China, markets remained closed due to a holiday.

The shares of Evergrande, the Chinese real estate giant, continue with stalled trading. The company is expected to sell some of its assets in an attempt to alleviate approximately $300 billion in debt. But the plight of two other real estate companies in China is also worrying: Fantasia Holdings and Sinic Holdings are cash-strapped and not paying their debts. Analysts estimate that the real estate sector accounts for 15% of Chinese GDP.

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Oi’s board of directors approved the proposal to sell a property in Brasília for R$100 million.

The property has a land area of ​​approximately 152,000 square meters and a building area of ​​34,645 square meters, the company said. The proposal was made by DFC Empreendimentos e Participações and Meirelles Mascarenhas Empreendimentos Imobiliários.

Unify (FIQE3) and Brisanet (BRIT3)

XP began coverage of the telecommunications sector in Brazil (ISPs) with a purchase recommendation in Unifique (target price of R$13) and Brisanet (target price of R$17 per share).

“The recommendations are mainly supported by: (i) our positive outlook for the Brazilian internet service provider (ISP) sector; (ii) strong growth dynamics and (iii) High-level operational execution in both companies, translating into higher margins and profitability. In short, Unifique is our preferred choice in the industry, given the attractive risk-return in current multiples,” XP analysts point out.

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Electromedia (ELMD3)

Eletromídia completed the acquisition of NoAlvo, a Brazilian startup focused on the out-of-home (OOH) media sector. The company provides a platform that has a campaign planning system, which crosses geolocated data from mobile devices with physical media points, so that it is possible to determine the addresses to advertise considering a certain target audience, providing data and metrics for advertisers. The transaction amount was not informed.

According to the company, the transaction will bring important synergies, in which Eletromidia will be able to leverage its sales by expanding its presence in its current customer base through a better planning, sales and after-sales experience; access new customers who do not invest significantly in OOH media due to the lack of available metrics; and complement its technology team with professionals who are experts in the OOH market.

NoAlvo will be immediately integrated into Eletromidia. The founders remain in the company, beneficiaries of a long-term stock option plan, focused on the development of Eletromídia’s technological and sales platform.

Omega (OMGE3)

Omega concluded the merger of the companies that comprise the Hermenegildo and Asteri Energia Wind Farms, with the extinction of the merged companies and, consequently, the cancellation of all shares issued by them.

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