Ibovespa is falling, going against the trend abroad; dollar retreats

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The previous day, the North American currency fell 0.16%, quoted at R$4.9373. The main stock index on the Brazilian stock exchange ended up 0.28%, at 127,752 points. Dollar operates on the rise Karolina Grabowska Ibovespa, the main stock index of the Brazilian stock exchange, B3, operates on the decline this Thursday (1st), after spending much of the morning in positive territory. The dollar also retreats. Investors continue to reflect on the interest rate decisions announced the day before in both Brazil and the United States. Here, the Monetary Policy Committee (Copom) of the Central Bank of Brazil (BC) to reduce the Selic rate by 0.5 percentage points, to 11.25% per year. The announcement that Grupo Soma and Arezzo are in negotiations for a possible merger of the two companies’ shareholding bases is also on the radar. See below for a summary of the markets. Dollar At 1:22 pm, the dollar fell 0.31%, quoted at R$4.9222. See more quotes. The previous day, the US currency fell 0.16%, selling at R$4.9373. With the result, it accumulated: increase of 0.55% in the week; and gains of 1.75% in the month and year. Ibovespa At the same time, Ibovespa fell 0.24%, to 127,442 points. Shares in Grupo Soma and Arezzo rose by more than 1%, amid news released the day before of a possible merger of the two companies’ shareholding bases. The companies continue to negotiate. According to statements from the companies, Alexandre Birman, president of Arezzo, would be the president of the combined company in the event of a definitive agreement. The president of Grupo Soma, Roberto Jatahy, would continue to be in charge of the brands under the group’s management (such as Hering and Farm). Other domestic consumption companies, such as CVC and construction company Eztec, are also advancing, with the lower interest rate scenario. Petrobras, which has an important weight in the composition of Ibovespa, rose almost 4%, following the appreciation of oil. The day before, the index rose 0.28%, to 127,752 points. With the result, it accumulated: decrease of 0.94% in the week; falls of 4.79% in the month and year. READ ALSO CASH OR CARD? What is the best way to take dollars when traveling? DOLLAR: When is the best time to buy the currency? Understand what makes the dollar rise or fall What is moving the markets? The interest rates decisions of the Copom and the Federal Reserve (Fed, the North American central bank) continue to be under the spotlight this Thursday. Yesterday, the Fed decided once again to keep US interest rates in the range of 5.25% and 5.50% per year. This remains the highest rate level since 2001. The decision was already expected by the market. However, Jerome Powell’s speeches after the meeting stood out. The Fed president said that the institution is not working with the scenario of cutting interest rates in March, reaffirming that this is unlikely. “This ended up being the fundamental phrase of your statement and the market reacted to this comment, with the probabilities of cuts in March going from more than 50% to around 35%”, points out José Maria Silva, Allocation and Intelligence coordinator at Ave. Despite dispelling expectations that the cycle of cuts will begin soon, the Fed adopted a more neutral tone in the meeting’s statement, highlighting the removal of the phrase, which was in previous statements, which mentions the possibility of the institution promoting further increases. interest rate as a way to bring annual inflation in the United States to 2%, explains Silva. In 2023, North American inflation ended the year with an increase of 3.4%, slightly higher than expected. Now, the market expects the Fed’s first rate cut to come in May. Still high interest rates worry the market because they make credit-taking processes more expensive for people and companies, which can reduce consumption and increase default rates. In this scenario, the biggest fear is that the United States will go through an economic recession in 2024. Here, the Copom reduced the Selic rate by 0.5 percentage points, to 11.25% per year, to the lowest level in two years , as expected. The Committee also signaled that it is working with a scenario of reductions of the same magnitude in its next meetings. For Ricardo Martins, chief economist at Planner Investimentos, however, the Copom already has room to promote bigger cuts in Brazilian interest rates. “Inflation falling and converging towards the target, associated with the evident slowdown in the economy, which grew by around 3% due to the statistical carryover from the first quarter of 2023 and began in the second quarter the path towards a contraction at the beginning of 2024, are clear factors”, comments Martin.

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