São Paulo – Ibovespa began the week to extend gains in the past few days, and closed higher on Monday (12), above 118,000 points, thus renewing the maximum since February. The movement kicked off from the external scenario, as indicators in the US ended the day lower after the speech of Federal Reserve Chairman Jerome Powell.
Here, the market continues to follow discussions on the 2021 budget. Last week, President Jair Bolsonaro said the executive and Congress were close to reaching an agreement, while the government’s economic team insisted that the president should use their veto power.
Information has circulated in the press that the Minister of Economy, Paulo Guedes, raised for discussion the possibility of editing a proposed constitutional amendment (PEC) that would cover a series of extraordinary expenditures, such as public expenditures and discretionary health expenditures. It would be possible to make room for the spending cap for reversible adjustments in the budget proposal.
Also on the radar is a consumer price index (CPI) installation to confirm the federal government’s responsibilities in fighting the epidemic. The atmosphere of the week began to pollute after Senator Jorge Kaguro issued a phone call claiming that Bolsonaro said he feared an “illegitimate report,” and would seek pressure to dismiss Supreme Court ministers and will continue to seek the inclusion of states and municipalities. Within the consumer price index range.
Outside, the session was lower for the major indices, as investors await the results season that starts this week in Europe and the US and a corrective move after hitting records in recent trading sessions.
Also note the interview with Jerome Powell for CBS “60 Minutes”. He said that the US economy is at a “turning point”, with expectations that growth and employment will accelerate in the coming months, but there are still some risks, especially any resurgence of the Coronavirus pandemic.
Still on the US radar, the most important thing is the resumption of activities in the US Congress after two weeks. Negotiations are now expected to begin on the $ 2.25 trillion infrastructure package, a top priority on the Democrats’ agenda. “Although Biden’s supporters express an interest in securing Republican support, they will not rule out the possibility of moving forward with the project through reconciliation, a maneuver that allows him to avoid blocking him in the Senate: In the face of strong democratic resistance, we believe the package must go.” Presented this way, “he highlighted the XP Analytics team.
As a result, the Ibovespa index closed 0.97% higher, at 118,811 points, its highest level since February 18th, when it settled at 119,199 points. The financial volume of this session reached 24.133 billion Brazilian reals.
On the other hand, the trade dollar rose 0.84% to 5.721 Rials buying and 5.722 Rials in selling, after having been triggered in the fall during the morning session. The dollar in May futures rose 0.62% to R $ 5.725 After the market.
In the future interest market, the DI for January 2022 rose two basis points to 4.71%, the DI for January 2023 rose from three basis points to 6.55%, the DI for January 2025 remained stable at 8 and 24% and the DI for January 2027 was the negative divergence of two points. To 8.87%.
It should also be noted that the classic “Fox Newsletter” compiles economic forecasts prepared by a number of institutions and issued by the Central Bank.
The report revealed that financial market economists have once again lowered their forecasts for economic growth in 2021. The average forecast fell from 3.17% to 3.08%. For the year 2022, the GDP is expected to grow by 2.33%, the same as the previous week’s forecast. Regarding the National Broadband Consumer Price Index (IPCA), the median forecast increased from 4.81% to 4.85% for this year, and fluctuated above 3.52% to 3.53% in 2022.
Expectations for the dollar also rose. Economists now see the currency at 5.37 BRL at the end of the year, compared to the 5.35 BRL expected last week. By the end of 2022, the dollar is expected to reach 5.25 Brazilian reals, which is the same as last week’s forecast. Finally, the benchmark interest rate forecast, Selic, increased from 5.00% pa to 5.25% pa for 2021, and stayed at 6.00% pa for 2022.
Returning to the foreign news, Asian stock exchanges mostly suffered losses, with a focus on Indian stocks which tumbled amid the resurgence of Covid in the country. The MSCI Index, which includes Asian and Pacific stocks outside of Japan, is down more than 1%.
On the other hand, Alibaba shares rose 6.51% in the session. China’s antitrust authority imposed a $ 2.8 billion fine on the group for misusing its dominant position over competitors and merchants on its e-commerce platforms. The country’s record penalty of 18.2 billion yuan, equivalent to 4% of the company’s annual domestic sales, comes amid a flurry of scrutiny in the business empire of the company’s founder, Jack Ma.
The Eurostoxx index, which includes 600 stocks from all major sectors in 17 European countries, has declined. Investors are avoiding placing big bets ahead of the corporate earnings season, while British retailers reopen their doors as the economy resurfaces from the strict winter lockdown.
In Europe, the UK government is easing lockdown measures in England from Monday. The government allows outdoor meals, hairdressers, gyms, stores, and outdoor attractions to reopen.
Budget is on the radar
Without major news about the impasse over the budget penalty, Valor Econômico reports that the government has drafted a bill removing locks from LDO that would prevent the reissue of BEm and Pronampe. With her approval, the Executive Authority plans to fund the programs through the issuance of exceptional appropriations.
It will not be necessary to wait for the 2021 budget to be approved, which has a deadline of only 22nd, much less, to encourage cuts to an already very tight spending schedule. This, at least, is the plan of the most pragmatic wing of the federal government.
Slow rate of immunization
According to Folha de S. Paulo, the federal government has already acknowledged a slowdown in the vaccination rate until the second semester.
Marcelo Quiroga, the health secretary, sees difficulties supplying even US vaccines and says he needs to “persuade” Jair Bolsonaro.
“From the second semester onwards, we will be able to provide more doses. The largest country to vaccinate its population is the United States. After they can vaccinate their population, we will have more doses, and this is what we expect,” Quiroga assesses.
Brazil recorded 1,803 confirmed deaths from the Covid-19 virus within 24 hours until Sunday night, with a total of 353137 victims. The new positive cases reached 37,017 out of a total of 13,482,023 million.
With the end of the emergency phase on Sunday, which began on March 15, the entire state of São Paulo returns on Monday to the red phase, in which it must remain until at least April 18. The end of the emergency phase occurs after a slight drop in the state’s ICU occupancy rate, which continues at 86%.
Face-to-face activities are permitted again in public and private schools, as long as they are authorized by the city government and with up to 35% of students every day. Sports competitions, such as the Paulista Soccer Championship, may return without an audience. Face-to-face services are still prohibited, and remote work is still mandatory for offices, administrative activities, offices, and other services.
Certain emergency phase measures have been maintained, such as curfews from 8 PM to 5 AM. In the city of São Paulo, the night rotation is maintained.
At the end of Friday’s trading session, Vale said in a statement that Samarco Mineração filed for bankruptcy with Belo Horizonte to prevent actions initiated by creditors from affecting the company’s ability to maintain its activities. Samarco is a joint venture between Vale and BHP.
In this second view, there is also a pricing of the Vale Participation Bonds offering that belongs to the Federal Government and BNDES.
Rede D’Or announced the signing of a binding memorandum of understanding to acquire 51% of Nossa Senhora das Neves, marking its entry into the João Pessoa-PB market (the state with 423,000 health beneficiaries). This is the second acquisition in less than 7 days and again with many attractions and room for expansion and organic growth. In our opinion the news is positive because it confirms one of the pillars of our investment thesis for the company – inorganic growth. We repeat our recommendation to buy with a target price of R $ 85 each Share, ‘highlights of the XP analysis team.
Fluorescent Diagnostic Medicine Group announced Friday that it has bought a majority stake in the orthopedic clinic Vita, which is still under acquisition. The company has reached an agreement to acquire 66.7% of the shares of Vita Ortopedia Serviços Médicos Especializados and Vita Clínicas Medicina Especializada for R $ 136.8 million. According to the company, “Vita is a reference in orthopedic consultations and surgeries as well as rehabilitation sessions, with a medical staff of more than 40 doctors and 80 therapists.”
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Hypera pharmaceutical group, in turn, announced that it had agreed to sell its distribution center in Goiania to the Newport Logistics Investment Fund for R $ 231.46 million. According to Hypera, the center was designated to process the company’s legacy consumer products and was leased out to third parties.
Petrobras reported Friday that its board of directors agreed on Friday to sign an agreement with the federal government specifying the shares of each contract and the amount of compensation for the state-owned company in the event of bids for surplus volumes of rights transfer in the Sibya and Atapu fields. The Rights Transfer Agreement, signed in 2010, between Petrobras and the Federal Government included the conduct of exploration and production activities in the Sibya and Taboo regions, with a production volume limited to 500 million barrels of oil equivalent (boe) in Sepia. And 550 million barrels of oil in Atapo.
“ In 2019, due to the absence of bids in the bid under the cumbersome waiver contract sharing of volumes in the regions of Sépia and Atapu, Petrobras and Pré-sal Petróleo SA (PPSA), eligible as representative by the Union, negotiated more competitive terms to achieve a new bid For regions, for the benefit of both parties, “the company said.
Still on the company’s radar, two of the 11 names appointed to form Petrobras’ board of directors have been deemed incapable of taking the position to work for companies with a direct relationship with the state-owned company in the past three years. The evaluation is carried out by the SOE’s People’s Committee, which is made up of members of the company’s current group and independent experts.
The SOE is promoting at this second extraordinary general meeting (AGE) to identify new board members.
Also in the spotlight, Allied made his debut at B3 in Monday’s session, after setting the stock price at incorporation at R $ 18.
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