Future Ibovespa operates close to stability; Wall Street investors monitor Fed and bank balance sheets

The Ibovespa futures opened the trading session this Friday (14th) without an exact trend. After falling at the beginning of trading, at 9:23 am (Brasilia time), the index maturing in February 2022 started operating at a slight increase of 0.07%, at 106,370 points. The Brazilian index follows the fluctuation of international markets, with investors still digesting yesterday’s speech by Federal Reserve Vice President Lael Brainard in the US Senate.

Brainard’s speech was interpreted by the market as having a harsher tone. She stated, for example, that the monetary institution of the largest economy in the world must finalize the tapering, the purchase of bonds, already in the first quarter of this year and that after the end of this process the Fed will be ready to raise interest rates.

The speech was different from what was presented by the institution’s president, Jerome Powell, the day before, also in the Senate. At the time, stocks rose, after an interpretation that the stimulus cut could be less aggressive.

“The period of greater volatility presented by the indices follows the release of the minutes of the Federal Reserve, which in turn revealed a tougher stance against inflation, signaling an increase in interest rates as early as 2022 and a potential reduction in the volume of its balance sheet. ”, comment the analysts of XP Investimentos, in morning call.

Investors there also monitor the balance sheet season. Today, Wells Fargo and JP Morgan brought in profits topping the consensus. The former had a net profit of $1.38 per share, compared to a consensus of $1.12. The second earned $3.33 a share, more than the $3.01 expected.

American stock exchanges operate in a one-way fashion. Dow Jones and S&P 500 futures are up 0.21% and 0.07%, respectively, at 8:55 am. The Nasdaq fell 0.14%.

In Europe, the trend is totally downward. Germany’s DAX is down 0.63%, France’s CAC 40 is down 066% and the UK’s FTSE is down 0.04%. The STOXX 600, with companies from across the continent, is down 0.61%.

Finally, in Asia, the declines were even more pronounced. In addition to the correction due to the drops recorded in western stock exchanges the day before, the indices there also suffered from the disclosure of exports in China, with growth decelerating, and the fact that the Bank of South Korea raised its interest rate to 1 .25%, returning to pre-pandemic levels.

Japan’s Nikkei index fell 1.28%. Mainland China’s Shanghai, 0.96%. Hong Kong’s HSI, 0.19%. South Korea’s Kospi, 1.36%.

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Iron ore also fell, with the price per ton down 1.43% at the port of Qingdao, at US$ 128.01, and by 2.30% at the port of Dalian, at US$ 113.68.

In the domestic market, interest rates rise again

The Ibovespa Futuro, in addition to tilting with the international market, also suffers from the Brazilian scenario.

Future interest contracts opened the trading session higher, with investors eyeing fiscal risk and also data that show that the economy is more heated than expected. The DI for January 2023 advances one basis point to 11.95%. The for January 2025 rises three points, going to 11.24%. The for January 2027 also rises one basis point, to 11.17%.

Pressure from public servants for salary increases continues. Representatives of the Federal Revenue Service met yesterday with Minister Paulo Guedes, and later commented that the meeting was frustrating. “We see this as an important fiscal risk for this year, as there is no space within the constitutional spending ceiling for a horizontal increase in salaries for all careers of civil servants”, comments XP.

In addition, after the Brazilian Institute of Geography and Statistics reported yesterday that the service sector in November proved to be more heated than the consensus, today it was the turn of retail data to surprise, with growth of 0.6% on a monthly basis, against a consensus of 0.20% decline from Refinitiv. The interpretation is that these numbers can put pressure on inflation.

The commercial dollar advanced 0.12%, trading at BRL 5.535 in the purchase and at BRL 5.536 in the sale. The futures rose 0.11% to R$5,554.

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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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