After a day of relief, in which the Ibovespa registered its first high of the week, the main index of the Brazilian Stock Exchange fell again and closed this Friday’s trading session (28), the last before the second round of elections, down 0.09%, at 114,539 points. There was R$ 24.63 billion in traded volume.

With this further drop, the Ibovespa’s balance for the week was down 4.49%. In the month of October, however, the index has gained 4.09%, while the accumulated appreciation for the year is 9.27%.

Vale knocks down the index

The main factor behind Ibovespa’s downfall was Vale’s (VALE3) shares, which sank 4.88% after the release of the company’s third quarter results.

Although predicted by the market, Vale’s results showed a tight scenario for the sector in the period, as a result of lower iron ore prices and rising production costs. The company’s net income in the third quarter was US$4.45 billion, down 18.7% compared to the same period in 2021.
Usiminas (USIM5) was also among the biggest falls of the day, down 4.17%, after reporting that its net income plummeted 67% in the third quarter, pressured by lower steel sales, higher cost of sales, and advancing investments. From July to September, the amount totaled R$ 609 million, below the R$ 1.8 billion reported for the same period in 2021.

Petrobras also weighed on the index, with shares reflecting the 1.33% drop in Brent oil, to US$ 93.77 a barrel. The preferred shares of the state-owned company (PETR4) fell 1.18%, while the common shares (PETR3) declined 1.51%.
On the opposite side, Suzano (SUZB3) had one of the day’s biggest gains, 3.75%, after publishing its third quarter results, showing that it strongly reversed the loss reported in the same period of 2021.

The largest producer of pulp on the planet closed the period between July and September with a profit of R$ 5.44 billion, compared to the loss of R$ 962 million in the third quarter last year. The consensus of analysts for Suzano’s profit was approximately R$ 1.56 billion.

The day’s highs, however, were in retail, technology and education stocks, benefited by lower than expected inflation data, explain analysts at Ativa Research. Among them, highlight to Méliuz (CASH3), Cogna (COGN3) and Americanas (AMER3), with advances of 8.33%, 5.3% and 4.84%, respectively.

The IGP-M (General Price Index – Market) dropped 0.97% in October, accelerating the retreat from September, when it had fallen 0.95%, according to FGV (Fundação Getúlio Vargas). With the result, the index has accumulated a high of 5.58% this year and 6.52% over the last 12 months.

Two days to the second round

In the political arena, the “Letter to Tomorrow’s Brazil” published by the campaign of former president Luiz Inácio Lula da Silva (PT), which caused euphoria in yesterday’s trading session, lost its effect on Friday.

“The material was received instantly by the market as positive, but when looking at the commitments it was realized that there is no news in the text,” explains Étore Sanchez, chief economist at Ativa Investimentos, in comments to the market.

Now, attention turns to the debate between Lula and President Jair Bolsonaro (PL) on Globo today, at 9:30 pm.

Abroad in the opposite direction

In the United States, market sentiment was boosted by signs of slowing inflation, offsetting negative balance sheets from tech companies. As a result, the S&P 500 rose 2.46%, the Dow Jones advanced 2.59%, and the Nasdaq rose 2.87%. In Europe, the Euro Stoxx 50 index closed with gains of 0.24%.

The September PCE (price index for personal consumption expenditures) released Friday showed that inflation remains at a high level in the U.S., but showed some signs of deceleration, which reinforced to the market a scenario in which the Federal Reserve, the U.S. central bank, will raise interest rates less from December on.
The Fed’s preferred inflation gauge advanced 0.3% last month. The core of the indicator, which excludes more volatile price items such as energy and food, rose 0.5%, as expected by analysts consulted by Reuters. In the annual comparison, the increase was 5.1%, slightly below the 5.2% projected by experts.

On the other hand, Amazon, which released results last night, left investors worried. Even though its profit was 20% higher than expected and its revenue came in on target, its operating profit fell 48% from the third quarter of last year.

In addition, the company made a projection of weak results for the fourth quarter – the period of year-end sales when retail companies usually shine. In view of this, the shares closed the trading session down by 6.8%.

Physical cryptocurrencies gold coins, Bitcoin


Ignoring the US stock market highs in the last session of the week, the cryptoactive market extended into Friday the stable scenario seen the day before.

Bitcoin (BTC) remains above $20,000 and is heading for a 10% rise, reflecting the strong appreciation seen on Tuesday and Wednesday as investors’ fears of more aggressive hikes in U.S. interest rates fell. In the month, the balance is also in the blue, with an advance of 7.3%.

Around 4:50 p.m., BTC was up 1.7 percent, trading at $20,273, according to data available on the TradeMap platform. At the same time, Ethereum (ETH) was up 2.9%, sold at $1,551.

After U.S. inflation data released on Friday came in line with market expectations, investors are now waiting for the Fed to announce a new interest rate hike next Wednesday (2).

Most of the market expects a new increase of 0.75 p.p (percentage point). In addition, attention will be focused on the press conference that the chairman of the monetary authority, Jerome Powell, will give after the publication of the data.

Expectations focus on the tone that the chairman will bring about the next steps of monetary policy, especially if there are gaps for a softer hike in the Fed’s last meeting, scheduled for December.