Western says it sees stock market giants benefiting from foreign inflows caused by interest rate cuts in the United States. (Disclosure)
A Western Asset says he remains optimistic about stocks in Brazil due to expectations of a reduction in the basic interest rate in the United States. “The most important thing comes from abroad,” says the house’s fund manager, Guto Leite, to Money Times.
This Wednesday (18), the Fomc should reduce interest rates by 0.25 or 0.5 percentage points, while in Brazil the Central Bank may increase the Selic rate – by 0.25 or 0.5 percentage points.
Western argues that the US economy should have a “soft landing”, heading towards a slowdown, but without a recession – the dynamic, adds the manager, would be positive for emerging markets.
In Brazil, says Leite, the government must show greater commitment to public accounts in order to contain an even greater increase in the Selic rate – which should be 0.75 points by the end of the year, dropping from the current 10.5% to 11.25%, according to Focus.
Western's manager says he still sees non-clients demanding portfolio adjustments. “The “We should start hearing the portfolio discussion for 2026 soon,” he says. “For now, no one wants to increase or decrease risk.”
What stocks does Western invest in?
Western says it sees stock market giants benefiting from foreign flow caused by the reduction in interest rates in the United States. In commodities, the manager has a preference for oil due to the supply control that OPEC can exercise.
“Prio (PRIO3) is our main bet, but we have a position in Petrobras (PETR4)”, said Leite. “Brava (BRAV3) is the most tactical bet, but it has the greatest upside potential.”
The manager also mentions sectors seen as more defensive and with “solid fundamentals”, with Eletrobras (ELET3) e Sabesp (SBSP3). Recent privatizations are also an element of optimism.
Itau Unibanco (ITUB4) would be the best stock among Brazilian incumbent banks, according to Western.In our view, there is still a load coming from growth and dividends,” he said.
Leite also mentions actions that would be “attackers”, with greater potential but more risk, such as Cyrela (CYRE3) e Cury (CURY3), which, he believes, would be in moments of strong profit. “The valuation is attractive and the execution is perfect,” said the manager.