Ibovespa opens unstable this Monday

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On Thursday, the main index of the Brazilian stock market advanced 0.44%, to 104,367 points. General view of the panels of the São Paulo Stock Exchange Cris Faga/Fox Press Photo/Estadão Content The Ibovespa, the main index of the São Paulo stock exchange, the B3, operates unstable this Monday (24th), with the fiscal framework starting his course in Congress and with an eye on interest rates in the United States with the release of new economic data for the week. At 10 am, the index fell 0.07%, to 104,294 points. See more quotes. On Thursday, the index rose 0.44% to 104,367 points. With the result, the Ibovespa accumulated the following results: In the week, the stock market had a decrease of 1.80%; In the month, the Ibovespa has gains of 2.44%; In the year, however, it accumulates losses of 4.89%. Government delivers new fiscal rule project to Congress What is messing with the markets? The week begins with investors keeping an eye on the beginning of the Brazilian fiscal framework and awaiting the results of large technology companies in the United States, as well as clues about the trajectory of interest rates in the country, with the release of new economic data for the week. The federal government delivered the final text of the framework last Tuesday (18) to the National Congress. The proposal will replace the spending cap on controlling public accounts. The market is now awaiting reception of the measures and possible adjustments by deputies and senators. Over the weekend, the president of the Central Bank, Roberto Campos Neto, made new comments on the fiscal framework and its potential for reducing interest rates this Friday (21st), at an event in London. He stated that the National Congress can make some corrections to the text of the framework, but that the project is in the “right direction” and that communication needs to be improved to reassure the markets and guide economic expectations. Campos Neto said that the final text of the framework, if approved, has realistic criteria for managing public accounts, and eliminates the “tail risk” of an explosion in public debt. “We need to move forward and explain better so that this can permeate through the markets, so that the inflation expectation improves and so that it opens up space for us to do our job of lowering interest rates”, said Campos Neto. Even so, the BC president’s speeches, signaling that there may not be a drop in interest rates in the short term, increased pressure on the government for a fiscal exit to try to encourage GDP growth. According to Julia Duailibi’s blog, Lula is demanding members of the government to look for alternatives that can offset the monetary policy. The Minister of Finance, Fernando Haddad, has practically been an isolated voice in defending the harmony between fiscal and monetary policy. This Monday, in Portugal, Lula returned to publicly criticize the current level of the basic interest rate in the Brazilian economy. “We have a problem in Brazil, Prime Minister, that I don’t know if Portugal has. It is that our interest rate is very high. In Brazil, the Selic rate, which is a reference, is at 13.75%. money borrowed at 13.75%, nobody. And there is no cheaper money”, declared Lula in a forum with investors in Matosinhos, in the European country. “And the truth is that a capitalist country needs money, and this money has to circulate. Not in the hands of a few, but in the hands of all”, he continued. In the Focus bulletin, financial market economists again raised their inflation estimate for this year, from 6.01% to 6.04%. It was the fourth consecutive increase in inflation expectations for this year. For 2024, the financial market’s inflation projection was stable at 4.18% last week. For the 2023 Gross Domestic Product (GDP) growth, financial market expectations rose from 0.90% to 0.96% in the last week. As for 2024, the growth forecast rose from 1.40% to 1.41%. Abroad, major US stock indexes closed with minimal gains on Friday after mixed quarterly results, as investors weighed how conflicting economic data could influence interest rates and anticipated a week full of corporate reports. A survey showed on Friday that US business activity accelerated to an 11-month high in April, making the outlook for the Federal Reserve’s monetary policy even more uncertain after data earlier in the week indicated a weakening economy. Initial plugin text

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