US and Asia futures fall, Europe advances in July 1st; PEC dos Auxílios and more market issues today

In the first trading session of the second half, New York futures indexes retreat, in the same direction as the closing of Asian markets this Friday (01), as inflation and interest rate increases continue to weigh negatively on risk perception. of investors. European stocks, on the other hand, operate higher after opening down.

On Thursday, the US core personal consumption spending index – the Federal Reserve’s preferred gauge of inflation, rose 4.7% last month on a yearly basis. While this was slightly below a Refinitiv estimate, it was still close to multi-decade highs, which did not help markets.

Despite the half-year change, global sentiment remains grim as the war in Ukraine shows no signs of coming to an end and inflationary pressures continue to build, prompting central banks to adopt an aggressive tightening monetary policy and exacerbating fears of a global economic slowdown.

Investors are on the lookout for more US economic data on Friday, with the latest ISM manufacturing index and construction spending figures scheduled to be released at 11:00 am ET.

In Europe, Reuters reported on Thursday that the European Central Bank will start a process on Friday to buy bonds from southern European countries, including Italy, Spain, Portugal and Greece. The ECB will use proceeds from past-due German, French and Dutch debt in an attempt to limit spreads between their respective borrowing costs.

In Brazil, the Senate approved the PEC dos Auxílios, which releases R$41.25 billion outside the spending cap, and a state of emergency that shields President Bolsonaro from challenges for failing to comply with the electoral law.

In terms of indicators, the highlight was the release of producer prices for May and the trade balance for the month of June, with Itaú forecasting a surplus of US$ 9.8 billion.

Check out more highlights:

1. World Scholarships

United States

U.S. index futures trade lower on Friday morning, after the S&P 500’s worst first half since 1970.

The Dow Jones Industrial Average and Nasdaq Composite were not spared. The 30-stock Dow lost 11.3% in the second quarter, dropping more than 15% in 2022. The Nasdaq, meanwhile, suffered its biggest quarterly decline since 2008, losing 22.4%.

The strong losses in the first half and quarter come at a time of very high inflation and tighter monetary policy.

See the performance of futures markets:

  • Dow Jones Future (USA), -0.35%
  • S&P 500 Futures (US), -0.35%
  • Nasdaq Future (USA), -0.37%

Asia

Asian markets reversed gains from previous sessions and ended with losses in July’s first trading session as investors digested positive factory activity data from a private survey in China.

The Caixin/Markit Manufacturing Purchasing Managers’ Index hit 51.7, above the 50 level that separates growth from contraction. That compared to last month’s reading of 48.1. Analysts polled by Reuters had expected 50.1.

Chinese President Xi Jinping arrived in Hong Kong on Thursday. He presided over the inauguration of Hong Kong’s new chief executive, John Lee, on Friday.

This is Xi’s first trip outside mainland China since the arrival of Covid. Lee will replace outgoing leader Carrie Lam.

  • Shanghai SE (China), -0.32%
  • Nikkei (Japan), -1.73%
  • Hang Seng Index (Hong Kong), -0.62%
  • Kospi (South Korea), -1.17%

Europe

European markets operate with modest gains, with investors assessing the region’s economic indicators.

Eurozone industrial production fell last month for the first time since the initial wave of the coronavirus pandemic two years ago, as higher prices and bleak economic prospects kept consumers wary of shopping, a survey showed.

The S&P Global Purchasing Managers Index (PMI) dropped to 52.1 in June from 54.6 in May, its lowest since August 2020 but just above a preliminary reading of 52. ,0. The sub-index measuring production fell below the 50 mark that separates growth from contraction to a two-year low of 49.3. In May it reached 51.3.

Eurozone inflation soared to a record 8.6% year-on-year in June, according to a first official estimate published on Friday, as the war in Ukraine continues to drive up food and energy prices.

  • FTSE 100 (UK), +0.28%
  • DAX (Germany), +0.15%
  • CAC 40 (France), +0.60%
  • FTSE MIB (Italy), +0.47%

commodities

Oil prices rose on Friday after sinking in the previous session, with OPEC+ saying it would maintain its planned increases in oil production in August and investors worried about the strength of the global economy.

  • WTI Oil, +1.24%, at $107.08 a barrel
  • Brent crude, up 1.45% at $110.61 a barrel
  • Iron ore traded on the Dalian Exchange was down 6.85% to 747.50 yuan, equivalent to US$131.95

Bitcoin

  • Bitcoin, +1.81% to $19,548.19 (from 24 hours ago)

2. Schedule

Today comes the trade balance for the month of June. Itaú forecasts a surplus of US$ 9.8 billion, down from US$ 10.3 billion in the same period last year. In the bank’s projections, exports should grow 2.3% compared to May, while imports should suffer a drop of 12%, with a reduction in purchases of fuels and fertilizers.

In the US, the latest ISM manufacturing index and construction spending figures are due out at 11am.

Brazil

8:00 am: June IPC-S

9:00 am: May producer prices

10am: June Industry PMI

3:00 pm: June trade balance, with Refinitiv projection of US$ 9.994 billion surplus

USA

10:45 am: June industry PMI

11 am: May construction spending, Refinitiv consensus points up 0.4% from April

11am: Industry ISM

3. Senate approves Aid PEC and text goes to Chamber

The plenary of the Federal Senate approved, this Thursday (30), in two rounds, the basic text of the so-called Proposal for Amendment to the Constitution (PEC) of Auxílios, which creates social benefits and expands existing programs in response to the crisis caused by by the soaring inflation and worsening of social indicators in the country.

There were 72 votes in favor and 1 against the matter in the first round. In the second, the score was 67 to 1. The vote was scheduled to take place the night before (29), but was postponed amid requests from parliamentarians for more time to analyze the substitute presented by the rapporteur of the matter, Senator Fernando Bezerra Coelho (MDB-PE).

Condemned to low growth and high inflation

Brazil is condemned to live with low economic growth and high inflation, if Lula or Jair Bolsonaro is elected president of the Republic. The statement was made by economist Edmar Bacha during his participation in the virtual seminar on the Real Plan, promoted by the Astrojildo Pereira Foundation.

“In 2016, the economic disaster of the PT government occurs. A recession of such magnitude that even today it challenges us. Bolsonaro’s government doesn’t come out any better in the picture either. Brazil’s GDP drops less than Latin America’s during the pandemic, but it also doesn’t recover as well as other countries,” he said.

Ipea raises forecast for GDP growth in 2022

The Institute of Applied Economic Research (Ipea) revised this Thursday, 30, its estimate for the performance of the Brazilian economy, which should have growth a little higher than expected this year, but lower next year. The expected increase in Brazilian Gross Domestic Product (GDP) for 2022 is 1.8%, followed by an advance of 1.3% in 2023. In the projection published on March 31, estimates were for an increase of 1.1% in 2022 and 1.7% in 2023.

Global recession risk on the rise

The Institute of International Finance (IIF) says that there are several different shocks at once in the current picture, and with that the risk of a global recession “is rising sharply”. In a report, the Washington-based entity made up of hundreds of international banks says it “always worries” when there are several different shocks acting simultaneously, like now.

The IIF says it has been warning “for some time” about the risk of a global recession.

4. Covid

Last Thursday (30), Brazil recorded 272 deaths and 75,106 cases of covid-19 in 24 hours, according to information from the consortium of press vehicles, at 8 pm.

The moving average of Covid deaths in 7 days in Brazil stood at 215, an increase of 57% compared to the level of 14 days earlier.

The moving average of new cases in seven days was 56,388, which represents an increase of 55% compared to the level of 14 days before.

The number of people fully immunized against Covid in Brazil reached 167,529,464, equivalent to 77.98% of the population.

The number of people who took at least the first dose of vaccines reached 179,087,249 people, which represents 83.36% of the population.

The booster dose was given to 94,967,347 people, or 44.21% of the population.

5. Corporate Radar

D’or Network (RDOR3)

The Board of Directors of Rede D’or (RDOR3) approved the distribution of R$ 219.3 million in interest on capital, or R$ 0.111 gross per share. Payment will be made on July 16th. The shares will be traded ex from the 7th of July.

Streak Drogasil (RADL3)

Raia Drogasil (RADL3) approved the payment of interest on equity (JCP) of R$74 million, or R$0.0449 gross per share. The shares will be traded ex-right from July 6th.

Telephone (VIVT3)

Telefônica’s board of directors (VIVT3) approved the seventh issue of debentures, in the amount of R$3.5 billion.

Board of Directors approved the fourth issue of debentures, in the amount of R$ 1.7 billion.

Omega Energy (MEGA3)

Ômega Energia (MEGA3) confirmed that the Actis fund bought 12.38% of the capital stock of the company, at a price of R$ 12.75 per share and moved R$ 905 million.

MRV (MRVE3)

MRV (MRVE3) sold two developments in Florida with a PSV of US$ 195 million

(With Estadão, Reuters and Agência Brasil)

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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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