Ibovespa closes on a high decoupled from abroad, but accumulates a 3% drop in the week; dollar goes to BRL 5.60

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SAO PAULO – On a day of little encouraging news, the Ibovespa overcame negative pressure from abroad and closed on a high, returning to the level of 103,000 points. For analysts, investors understood that the stock market’s falls in recent days were too much and looked at assets more calmly, which generated a punctual price recovery movement. Even with today’s high, the index accumulated a drop in the week and has a negative balance in November.

It was an arm-wrestling session among the stocks of the highest weight in the index. While Petrobras closed down 1.38% for ON assets and 1.66% for PN papers and with the drop in international oil prices, Vale rose 2.73% with a recovery in iron ore.

The pandemic once again impacted commodities and stock exchanges abroad, after Austria announced a new lockdown for next week, after an increase in Covid-19 cases in the country due to a low rate of vaccination. Germany also adopted restrictive measures and does not rule out going the same way as the neighboring country.

“Here you have fiscal risk and low growth, but there is no tendency to lockdown and the economy stops again. Today, the market took some of the prize for Brazil based on that, after significant drops in our index”, says Rodrigo Franchini, partner at Monte Bravo.

Juan Espinhel, investment specialist at Ivest Consultoria, says that the market has become more optimistic about a possible approval of the PEC dos Precatórios in the Senate. For him, a slicing of the PEC would increase the chances of an understanding between the senators without the need to return the text to the Chamber. “We only have three to four weeks of active Congress before the break and this will be a key period, because next year, as it is an election year, it is not possible to have major budget changes”, explains Espinhel.

He says that, even though they don’t like the PEC, investors see the proposal as a milder alternative to a direct hole in the Public Spending Ceiling, which could worsen the government’s accounts more quickly. In one way or another, moving the Budget, pushing judicial debts forward, puts the Union’s ability to honor its commitments into question, which forces the Central Bank to offset this risk by raising interest rates. The vote on the PEC in the Senate is scheduled for next week, which should have strong fluctuations for the Ibovespa, according to analysts.

Today, the index closed up 0.59% at 103,035 points. The volume traded was R$27 billion. In the week, the Ibovespa accumulated a drop of 3.1%. Ibovespa futures maturing in December 2010 trades up 0.07% at 103,560 points near the close.

The commercial dollar rose again and ended Friday at a high of 0.7% to R$ 5.608 in purchases and R$ 5.609 in sales. In the week, the American currency accumulated a high of 2.76%. Dollar futures maturing in December trade up 0.93% to R$5.620 in the last trades of the day.

In the interest rate futures market, the DI for January 2023 dropped 11 basis points to 12.05%; DI for January 2025 retreated 16 basis points to 11.93%; and the DI for January 2027 was down 12 basis points, to 11.74%.

Roberto Campos Neto, president of the Central Bank, said today, during a lecture, that he is concerned about inflation expectations for Brazil in 2022. He also stated that the trajectory of public debt would become explosive if the Selic (basic interest rate) ) remain at high levels, between 11% and 12%, and the country will grow by around 1%.

In the United States, the US House of Representatives on Friday approved the nearly $2 trillion spending package on education, health and climate change by US President Joe Biden, known as Build Back Better Act. Despite the opposition of Republicans, claiming that the measure could worsen inflation in the country, the package got 220 votes in favor.

The indexes in New York gave way, however, with the negative repercussion of the advance of Covid-19 in Europe. The Dow Jones closed down 0.75% to 35,601 points; the S&P 500 retreated 0.14% to 4,697 points; and the Nasdaq technology exchange rose 0.4% to 16,057 points.

Over the weekend, investors should follow signs of a possible succession at the US central bank, the Federal Reserve. President Joe Biden may nominate a name to replace the current chairman, Jerome Powell.

In Europe, the Stoxx 600 index, which brings together the shares of 600 companies from all major sectors in 17 European countries, closed down 0.33% with the risk of new lockdowns. It was also for this reason that oil prices had their biggest drop in six weeks. Brent barrel, the benchmark price for Petrobras (PETR3, PETR4), dropped 3.4% to $78.46 a barrel. WTI fell 3.67% to $76.11 a barrel.

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About Yadunandan Singh

Born in 1992, Yadunandan approaches the world of video games thanks to two sacred monsters like Diablo and above all Sonic, strictly in the Sega Saturn version. Ranging between consoles and PCs, he is particularly fond of platform titles and RPGs, not disdaining all other genres and moving in the constant search for the perfect balance between narration and interactivity.

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