Still reflecting the caution that was imposed on the appetite for risk since last Tuesday, when the higher than expected reading for consumer inflation in the United States in August was known, the Ibovespa extended on Thursday, 15, the negative series for the third day by closing down 0.54%, at 109,953.65 points, the lowest closing level since September 8. On Thursday, it oscillated from 109,523.89 to 111,100.41 points, leaving the opening at 110,546.52. Weak, the turnover was R$ 22.4 billion on the eve of expiration of stock options. In the week, the index falls 2.09%, still showing a gain of 0.39% in the month – in which the flow of foreign resources out of the Stock Exchange reaches R$ 1.229 billion until the day before yesterday – and a high of 4.90% in the year.
“The Ibovespa tends to stay sideways until the Federal Reserve’s monetary policy decision next Wednesday. The US industrial production data released today, weaker, show that the interest rate hike has had an effect on activity there and, with the Fed’s bias still ‘hawkish’ to control inflation, there is doubt about the terminal rate, which has resulted in revised projections, such as those of Credit Suisse (SIX: CSGN), which went from the range of 3.75%-4.00% to 4.25%-4.50% at the end of the cycle,” points out Nicolas Farto, a specialist in variable income at Renova (BVMF:RNEW11) Invest, which expects a 75 basis points increase for the fed funds on the 21st, a date when the world will be, as usual, attentive to the details of the communication from the American Central Bank, especially in the press conference by Chairman Jerome Powell.
Farto also observes the ongoing revision of growth projections for China, a fundamental country for the price formation of commodities such as ore, to which Ibovespa has great exposure. This week, Fitch revised its estimate for China’s GDP expansion from 3.7% to 2.8% in 2022, and from 5.3% to 4.5% in 2023. China’s slowdown has reinforced the prospect that the government will react with fiscal stimulus, at a time when monetary policy remains loose in the country, unlike other major economies. On Thursday, contributing to the advance of Vale (BVMF:VALE3) (ON +2.01%) in the session, the ore rose 0.70% in Dalian, China.
In Brazil, the IBC-Br, considered a leading indicator of the GDP, was a positive factor, which could be reflected in a favorable performance of shares with exposure to the domestic economy, such as consumer goods – which was not the case this Thursday when the ICON closed down 1.27%. On the other hand, the advance of Vale was decisive for the basic materials index (IMAT) to close with a slight gain of 0.04%, on a moderately negative day for Petrobras (BVMF:PETR4) (ON -0.23%, PN -0.19%) despite the strong correction seen in oil, with a drop of more than 3% that returns the Brent to the line of US$ 90 per barrel, below which purchases usually prevail.
Among the major banks, only Itaú (BVMF:ITUB4) (PN +0.26%) detached itself from this third day of losses for the Ibovespa. On the negative side of the index, Ecorodovias (BVMF:ECOR3) (-11.97%), Cosan (BVMF:CSAN3) (-4.65%), Via (-4.60%), Qualicorp (BVMF:QUAL3) (-4.29%) and Sabesp (BVMF:SBSP3) (-4.21%). On the opposite side, Positivo (+7.24%), Embraer (BVMF:EMBR3) (+3.58%) and Marfrig (BVMF:MRFG3) (+2.56%), ahead of Vale (+2.01%).
“The July IBC-Br came in above the ceiling of estimates. Yesterday, the market had been parsimonious because of the weakening of the retail reading for the same month, with a drop of 0.8% in the restricted retail market and 0.7% in the expanded one. The counterpoint to the weakening of retail is the recovery of services, a sector that should continue to pave the way for economic growth in Brazil in the second half of the year,” says Camila Abdelmalack, chief economist at Veedha Investimentos.
“The IBC-Br came in very strong with growth above 3.5% for the economy, year-on-year, and month-on-month very strong as well, which shows that the Brazilian economy entered the second half of the year expanding. August and September should show cooling, on the margin, with the economy still growing but at a slower pace,” says Victor Candido, chief economist at RPS Capital. In Brazil, “the discussion of ‘higher for longer’ interest rates should gain strength in the market and the Central Bank tends to maintain the harsh tone of communication, although we consider that the cycle of high Selic is already completed,” which should become clearer next Wednesday, adds the economist.
What is the Ibovespa?
To understand what an Ibovespa is, you first need to understand the basics of how a stock exchange works. Among other assets, this is an environment where you can buy and sell stocks, right?
With so many investment opportunities out there, some stocks are the most sought after by investors, and therefore the most traded by investors. That is where Ibovespa comes in.
The Bovespa Index, or Ibov, is the main indicator of the Brazilian stock market.
It is so important because it shows in one place the behavior of the most traded stock in B3, the Brazilian Stock Exchange.
The Ibovespa consists of a theoretical stock portfolio containing the securities with the highest financial volume traded on the Brazilian Stock Exchange in a given period of time, which helps a lot in monitoring the average profitability of these important stocks.
Do you understand what is happening here? When you hear that Ibovespa (or Brazil’s stock market) has gone up, it means that most of the stocks that make it up have appreciated during this period.
Now, if the news is not so good, and comes down to the Ibovespa’s fall, it is a sign that some of the most important stocks in our market were down at the time.
By Lucinélha Feijó