Ibovespa rises 1% and approaches its historic high with a jump from Vale (VALE3); dollar falls to R$5.44 – Money Times

In a 'rollercoaster' movement, the Ibovespa (IBOV) caught its breath and returned to positive territory — and approached historic highs.

This Thursday (26), the main index of the Brazilian stock exchange rose 1.08%, to 133,009.79 points.

Already the dollar in sight (USBRL) ended the session R$ 5,4447 (-0,57%).

In the domestic scenario, investors reflected on the Quarterly Inflation Report (RTI).

The Central Bank improved its projection for an increase in Gross Domestic Product (GDP) to 3.2% this year, but expects the economy to slow down next year.

In the document, the BC also stated that inflation projections rose throughout the horizon presented in comparison with the analysis carried out in June, thus increasing the gap in relation to the target.

In Itaú's assessment, the RTI reinforced the reading that the recently started interest rate hike should extend over the next few months, towards the bank's projection of Selic at 12% per year at the end of the monetary tightening cycle .

Furthermore, the market followed new statements by the president of the Central Bank, Roberto Campos Neto.

In the same vein as the statement and minutes of the most recent meeting of the Monetary Policy Committee (Copom), he said that the current monetary policy cycle “is open and it is necessary to observe the data”.

The inspector also worried again. Fitch Ratings stated that Brazil's current fiscal policy and its effects are not keeping up with the strong performance of the national economy and that challenges for the federal government are expected to persist and grow next year.

The risk agency highlighted that fiscal performance has been weaker than expected in relation to the initial budget projections for 2024 and that a mismatch between fiscal policy and GDP growth could affect the country's risk rating, currently at “ BB”.

Stock market rises and falls

Among the assets traded on the exchange, the Azul (AZUL4) led gains with the prospect that negotiations with plane lessors near completion. The airline's shares jumped almost 15% during the trading session.

The mining and steel sector followed the pace of gains, following the performance of iron ore. After a series of stimuli, the Chinese government announced that it will soon announce more measures to boost the country's economy.

The January iron ore contract most traded on China's Dalian Commodity Exchange (DCE) ended the day with an increase of 1.75%, at 728 yuan (US$103.73) a ton.

Therefore, Vale (ELECTION 3) jumped more than 6% during the session — and sponsored the return of the Ibovespa to the level of 133 thousand points.

The education sector was also highlighted. The actions of Relatives (COGN3) is yes Yduqs (YDUQ3) were among the biggest risers with rumors that the companies had resumed talks for a new merger attempt.

On the negative side, Brava Energia (BRAV3) led the index's losses for the second time in a row, with performance driven by oil — which fell more than 2%. Petrobras (PETR4;PETR3) also fell with the commodity.

Exterior

Nos USAinvestors reacted to new economic data and Wall Street had another day of records.

The GDP of the world's largest economy expanded at an annualized rate of 3.0% in the second quarter, in line with market expectations.

Growth in the first quarter was revised upward to a rate of 1.6% from the previously reported 1.4% pace.

Additionally, the number of initial unemployment claims fell to 218,000 in the week ending September 21, according to data from the country's Department of Labor.

The result was below the expectations of economists polled by Reuters, who expected an increase to 225,000, compared to a downwardly revised 219,000 applications in the previous week.

The data moved bets on a 50 basis point cut by the Federal Reserve in November slightly lower as it did not show further weakening of the labor market.

Os traders they now see a 52.8% probability that the Fed will cut rates by 50 basis points, in the range of 4.25% to 4.50% per year, in November, according to the CME Group tracking tool. Yesterday (25), this probability was 57.4%.

For tomorrow, the market awaits the release of the Price Index for Personal Consumption Expenditures (PCE) for August — the Fed's preferred indicator for inflation.

Check out the closing of New York indices:

• S&P 500: +0.40%, at 5,745.37 points — at the highest closing level;
• Dow Jones: +0.62%, at 42,175.11 points;
• Nasdaq: +0.60%, at 18,190.29 points.

*With information from Reuters