5 reasons for the Ibovespa to surpass 104,000 points today, according to 4 analysts

Campos Neto
Calm down: Campos Neto, from BC, encouraged the market with statements considered dovish (Image: REUTERS/Ueslei Marcelino)

The market ends this Wednesday (24) with a feeling of relief. The Ibovespa closed again above 104,000 points for the first time in seven trading sessions, after hitting rock bottom on Monday (22), when it closed at 102,122 points – the lowest level of November so far.

Commodities on the rise and the expectation that the telenovela of the PEC dos Precatórios is close to ending supported the Ibovespa, which closed up 0.83%, reaching 104,514 points.

See everything that made the stock market go up today, according to Land Investments, Now, Guide and ModalMore.

1. High inflation in the US – good news!

While Brazilians suffer from high prices, the market received it with a discreet smile US inflation data released today. The PCE, the Federal Reserve’s preferred index, accelerated again in October (+0.6%), compared to September (+0.3%). Compared to a year ago, the increase was 5% – the highest since the 1990s. But for investors, this may be good news for two reasons. First, the PCE was slightly below expectations. Second, inflation was driven by the increase in the wage bill and, by table, the consumption of goods and services.

2. Falling unemployment in the US – another good news!

The prevailing market reading is that rising inflation reflects the recovery of the US economy. This assessment is reinforced by another indicator released today – new claims for unemployment benefits. The volume of requests dropped to the lowest level in 52 years – yes, you read that right.

3. US GDP on the rails

The second preview of US third quarter GDP was 2.1%, compared to the same period last year. Although slightly below estimates, the performance pleased analysts, who reinforced the feeling that the world’s biggest economy is finding itself again.

3. No news at Fed

In the midst of all this, the market still pored over the minutes of the last Fomc meeting (the American equivalent of Copom). Practically, although the tone of the text was more hawkish, that is, more prone to a monetary tightening, there was nothing that deviated from what investors had already expected.

4. Campos Neto relax

In Brazil, the president of the Central Bank, Roberto Campos Neto, gave statements considered dovish (that is, more tolerant of inflation) by the market. For the banker, inflation is transitory, and the important thing is to stimulate the economy in 2022. The result was a slowdown in the interest rate curve. Only short-term contracts, maturing until May, continue to accelerate.

5. Iron ore, thank you!

Right at the beginning of the trading session, the Ibovespa fell, pressured by impasses in the approval of the PEC dos Precatórios by the Senate. But a new high in iron ore, in China, returned to animate the papers linked to commodities. THE Valley (VALLEY3) ended at a high of 2.32% and helped to pull the index.

About Abhishek Pratap

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