You don’t even have to be soooo well informed to know that things are not going well here, just look around. But the United States has another story to tell. And despite local regrets, where health, fiscal and political risks mix, and assets in Brazil were governed on Monday (5) by the pace of “standard Chinese” growth in the American economy.
The Ibovespa opened the week with an increase of 1.97%, to 117,518 points.
With 70 of the 82 shares on the rise, the index moved between purchases and sales R $ 19.4 billion. The volume was 27% below the daily average in 2021, of R $ 26.7 billion.
- The main highlight among the roles, however, walked with its own legs. Vale’s shares, with the largest share in the composition of the Ibovespa (13%), shot up 6.16%. And it had little to do with the modest 0.5% rise in iron ore prices in the last round of negotiations in China. The main catalyst for the heated demand for the former state’s papers was the R $ 26 billion paper buy-back program announced by the company after the last closing, on the fifth (1st) pre-holiday;
With this transaction, the shares that continue to circulate in the market tend to appreciate in the long run. The company’s current market value, after all, will be largely redistributed among fewer shares in circulation. The same goes for dividends (distribution of profits), which will be divided among fewer shareholders and, therefore, will have higher values per share.
Furthermore, when Vale goes after its own papers, it signals that it believes that they are being sold at prices below the company’s fundamentals. In other words, it considers it a good deal to buy its own papers because it sees significant appreciation over time until the price it considers fair to be reached. Consequently, it encourages the heated demand for Vale’s shares, in the case of this trading session.
With the purchase pressure well above the seller, R $ 3.7 billion were moved by the company’s papers this Monday. It represents no less than 19% of the entire flow of Ibovespa’s 82 shares.
- Contrary to most of the Ibovespa and banking sector shares, Banco do Brasil shares were the negative highlight of the session. Slipped 0.13%, in the wake of the appointment of its new president, Fausto Ribeiro.
He takes over the post left by André Brandão, who asked for the accounts after months of trembling with President Jair Bolsonaro. It all started when Brandão wanted to close some branches of the bank, but Bolsonaro was opposed. The situation seemed to be circumvented, but, after Bolsonaro’s interference with Petrobras, the executive again wanted to leave in the face of the impossibility of carrying out technical management in state-owned companies. Counselor also asked for the bills in the past few days.
The new president has already said what he came for. On Monday, he demonstrated that friction with Bolsonaro should not be a problem. On Monday, for the shareholders’ headache, a message sent by him to employees was made public. Fausto said that Banco do Brasil “is from the market”, but also “is from Brazil”. The bank’s career clerk has warned that he will continue “Acting in an integrated and synergistic way with your controller’s guidelines”. That is, with the federal government.
But, as stated above, the tone was set in general by the United States.
- New data signaled the overheating of the largest economy in the world, which is expected to grow by 6.5%, or more, this year. And if things go well there, they will go better (or “less worse,” at least) for your business partners.
Investor confidence found support, first, in data released last Friday (2). It was expected that 675 thousand new jobs would be created in March on American territory. 916 thousand new posts flourished, more than 35% of what was expected by analysts. Unemployment in the United States, from the unemployment of 14.7% of the labor force reached in April of last year, has already plummeted 6%.
These figures followed the result also above the expectations of the local industry, presented last Thursday. And that, by itself, would be enough to offer a Monday of earnings. The incentive to buy shares, after all, was dampened by the holiday last Friday. But another indicator was added to this, released on Monday, and it also gave an additional gas to the rate of increase of the indexes in New York, following in Brazil.
The activity index (PMI) measured by the Institute for Supply Management (ISM) was 63.7 points in March, well above 50 points, which indicates expansion. But it was not just that. It was registered a number higher than the 55.7 of February and the average expectation, around 59 points. And there’s more. The pace of growth at the heart of the American economy quietly surpassed the record abandoned in October 2018. Which means that the American service sector already has greater traction than that of the last pre-pandemic months.
The American recipe for the resumption is no mystery. Since the Trump administration, trillions have been spent to help families and businesses. The current president, Joe Biden, continued the stimulus, approving in Congress an amount of US $ 1.9 trillion in aid to the economy, which raised to US $ 5 trillion the stimuli practiced by the White House since May last year. And now, it wants to approve a package of over R $ 2.3 trillion to invest in infrastructure over the next 8 years.
Accelerated vaccination is also part of this American recovery process. It brings forecasts of sustainable reopening soon, in which the numbers of contagions due to new strains also weigh upwards.
- With so many dollars poured into the global economy, also by the hands of the American central bank, it is to be expected that its cost will be cheaper in other currencies. The landing on the stock markets also contributed to its depreciation against other currencies, becoming less scarce in the respective countries.
In Brazil, the spot dollar closed the day 0.61% cheaper, at R $ 5.67797.
- Everything very well, everything very good? Calm. We are not an island, but we are Brazil, and the fall in the price of the American currency was limited by the local scene.
In the first days of April, we do not yet have a budget set for 2021. What we have is a text in which mandatory government spending has been camouflaged in Congress to allow for the release of more spending by deputies and senators with their electoral bases. In other words, a text that if followed to the letter will cause the government to break the spending ceiling in practice. And it will place the sword of a possible impeachment process on Bolsonaro’s head.
But the day was without much news, the stalemate remains in the air. The political wing of the government advocates maintaining a ceiling as it is, albeit at the expense of imploding the spending ceiling. The economic wing is going in the opposite direction, in line with the austerity agenda advocated since the campaign. Behind-the-scenes news from Brasilia points to a clash between the Minister of Development, Rogério Marinho, and the Minister of Economy, Paulo Guedes. Not so long ago, Guedes publicly dubbed Marinho the “hole in the ceiling”.
This time, at least in front of the microphones, Guedes seeks to put warm cloths in the dispute. In an event this afternoon, he pointed out that the possibility of vetoing the makeup proposed by Congress would take away the possibility of Bolsonaro being deposed by this route. On the other hand, he admitted that it would bring a “politically uncomfortable” scenario to the Plateau – in other words, it would leave Centrão unhappy. Although he did not say what then would be a solution for the case, he said that the government works for a “legally armored” and “politically satisfactory” text.
- While investors waited, they operated on fixed income giving more ball abroad. The rates for Interbank Deposit (DI) contracts for January 2022 decreased from 4.68% to 4.60%. They reflect more immediate expectations for the Selic;
- The end of the curve is more linked to the intensity of the government’s default smell in the air and, consequently, to the expectation of interest rates consistent with this risk up front. And the rates for January 2031 slipped from 9.33% to 9.24%.
usa – Photo: Getty Images
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