Ibovespa opens down on Friday, 20 (Image: REUTERS/Amanda Perobelli)
O Ibovespa (IBOV) opened trading this Friday (20) without a defined direction. The main index of the Brazilian stock exchange slowed 0.03%, to 133,087 points, around 10:08 am.
The spot dollar was slightly higher against the real in early trading this Friday, in line with its strength against most of its strong and emerging peers.
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'There is no point in raising interest rates if the fiscal remains out of control'
Thursday (19) after “Super Wednesday” brought a different scenario for the Brazil compared to other global markets.
According to Matheus Spiess, analyst at Empiricus Researchdespite the appreciation of the real and the good performance of commodities, local assets were pressured by the rise in interest rate curve premiums — especially in longer terms, reflecting the persistence of fiscal risk.
“In other words, raising interest rates will not be effective if fiscal control remains precarious,” he ponders.
For the analyst, though it is possible to avoid this extreme scenariothe neutral real interest rate — which would be sufficient to keep inflation within the target — is estimated at around 4.75%.
“With inflation close to this level, a Selic rate at 12% would mean interest rates 2.5 percentage points above the neutral rate, configuring an extremely restrictive policy,” he points out.
The impacts of this increase would be severe for the economy, but, according to him, its full effects would only begin to be felt from the second half of 2025.
Meanwhile, on the international stage, markets performed excellently, with the S&P 500 posting its 39th record high of the year at the close, extending gains to around 20%.
“The narrative that excites international investors is the expectation that the Federal Reserve will lead the US economy to a soft landing, the so-called Goldilocks“, he concludes.
'No change'
After the Bank of England (BoE) keep the interest rate unchanged at 5% yesterday (19), emphasizing that it will not rush to ease monetary policy, the People's Bank of China (People’s Bank of China) and the Bank of Japan (BoJ) followed a similar approach, choosing not to change their interest rates.
According to Matheus Spiess, the focus is especially on the Bank of Japan, which had the greatest impact on the market in August and could once again influence the real due to the volatility of the yen.
“In its decision, the BoJ signaled that it sees no urgency in raising interest rates, keeping them at 0.25%, while monitoring financial markets after the increase made in July. This positioning contrasts with the data released today, which showed an acceleration in Japan's main inflation indicator for the fourth consecutive month,” he ponders.
The analyst says it is important to remember that the BoJ has already raised rates twice this year, ending its negative interest rate policy in place since 2016.
Since the beginning of July, the yen has appreciated more than 12% against the US dollar, a move that weakens the real, since the yen is a currency frequently used for “carry trade“.
At a press conference, BoJ Governor Kazuo Ueda indicated that the institution will continue to raise interest rates gradually, as long as economic and price data evolve as expected.
“This more restrained positioning suggests that the stress observed in August is unlikely to be repeated with the same intensity, bringing greater predictability to the market,” he concludes.
Petrobras (PETR4) pays dividends and JCP this Friday
A Petrobras (PETR3;PETR4) pays this Friday (20) the second installment of R$ 13.45 billion in dividends related to the balance sheet of March 31, 2024.
According to the company, the gross amount to be distributed today corresponds to R$0.52162113 per common and preferred share, with R$0.44806667 in the form of dividends and R$ 0.07355446 in the form of interest on equity (JCP).
The cut-off date was June 11, 2024 for holders of shares issued by Petrobras traded on B3 and record date on June 13, 2024 for holders of ADRs traded on the New York Stock Exchange (NYSE).
Vale (VALE3) declassifies dam in Minas Gerais
A Vale (ELECTION 3) informed the market, this Friday (20), that it has completed the decharacterization of Dike 1B of the Conceição System, located in Itabira–MG. According to the mining company, this is the 15th upstream structure eliminated, completing 50% of the Upstream Dam Decharacterization Program.
Initially, the deadline for the decharacterization works was December 2024. From now on, the decharacterization will undergo the evaluation and validation process of the competent bodies, in accordance with applicable legislation.
“Since 2019, Vale has consistently advanced its commitment to eliminate all of its upstream dams in Brazil. Vale has already disbursed more than R$9 billion to implement the program. The structures are inactive and under permanent monitoring, 24 hours a day, by the Company’s Geotechnical Monitoring Centers,” the company highlights.
Equatorial (EQTL3) elects Yduqs president to preside over the board of directors
The electricity and sanitation company Equatorial (EQTL3) announced this Thursday (19) that it elected Eduardo Parente Menezes, executive president of the teaching group Yduqsfor the presidency of its board of directors.
Parente will take over from Carlos Augusto Leone Piani, who resigned from his position and other administrative positions at the Equatorial group, the company said in a statement to the market.
In addition to the change in the board presidency, Equatorial announced the election of Tinn Freire Amado as a member of the board.
*With information from Reuters