Read this Thursday’s edition of the FolhaMercado newsletter (22) – 06/22/2023 – Market

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Haddad loses…

As expected, the Central Bank’s Copom (Monetary Policy Committee) maintained the Selic at 13.75% per annum at its meeting this Wednesday (21).

What everyone was watching was the communiqué, looking for some clear indication from the Central Bank about lowering interest rates at the next meeting, in August. She did not come, despite pressure from the government and businessmen.

The tone of the document is seen as a defeat for Minister Fernando Haddad (Finance), who has said that there is room to reduce interest rates in the country. A Sheet found that the economic team interpreted the statement as a “boycott” of the government.

Understand: the collegiate even softened the tone of the text by discarding the message that spoke about the possibility of raising the Selic rate again, but other excerpts from the document indicated that the door remains closed to a scenario of interest rate cuts:

• “The current situation, characterized by a stage of the disinflationary process that tends to be slower and by unanchored inflation expectations, continues to demand caution and parsimony”.

• “The strategy of maintaining the basic interest rate for a prolonged period has proved adequate to ensure the convergence of inflation”.

In numbers: to base the decision, the Copom cited the inflation projections in its reference scenario, which fell from 5.8% to 5% in 2023 and 3.6% for 3.4% for 2024.

• Although they have improved, they are still above the target (3.25% this year and 3% next year).

Opinion | Columnist Vinicius Torres Freire writes about how long the BC’s interest rate crunch can last.

And in investments? Incentivized infrastructure debentures continue to be the securities with the highest real return among the main fixed income investments, according to a survey by the investment search platform Yubb.

• See here how the profitability of other investments in fixed income is and here how much R$ 1,000 yield in savings, CDB and Treasury with Selic at 13.75%.

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… and wins

The Senate approved this Wednesday the new fiscal framework by 57 votes to 17 – 41 were needed.

Now, the project will have to return to the Chamber because it was subject to changes, which were considered as victories for Haddad:

↳ The list of expenses that will be outside the spending limit was expanded, and now includes Fundeb, the Constitutional Fund of the Federal District and expenses with science and technology.

↳ Device that allows the government to include expenses in the Budget for the next year above the spending limit – provided that they are conditional on the approval of credit by the Legislative in 2024.

remember. The new fiscal rule that will replace the spending ceiling has a main structure: the forecast that the growth in expenses will be limited to 70% of the advance in revenues accounted for in the 12 months up to June of the previous year, after discounting inflation.

• There is, however, a floor of 0.6% and a ceiling of 2.5% for the real increase in expenses.

• The plan outlined foresees zeroing out the deficit (revenue less than expenditures) by 2024 and generating a surplus (revenue greater than expenditures) of 1% of GDP by 2026.

• If the target is not met, the proportion of increase in expenses in relation to revenue drops to 50%, until the trajectory of results within expectations is resumed.

• We explain the new rule in more detail here.

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cow of millions

The sale of a third of a Brazilian cow at an auction held last Friday (16) broke a world record. The value of the business was BRL 6.993 millionwhich values ​​the animal at about BRL 21 million.

The cow involved in the auction is Viatina-19, a third of which was purchased by the company Nelore HRO, from Arandu (SP). She will share ownership of the animal with Casa Branca Agropastoril and Agropecuária Napemo.

• Half of Viatina-19 had already been sold last year for R$3.99 million (R$4.17 million, adjusted for inflation).

Why is it worth so much? Animals like Viatina-19 are valued for having a lineage with pedigree and productive characteristics that will provide financial return to the investor.

• In the last 12 months alone, it has resulted in business from BRL 6.849 millionincluding pregnant and calf, according to the White House.

The objective of genetic improvement is for the animal to transfer the genetics to its descendants and for them to produce more meat in less time and less space.

The Biography of Viatin-19: born on January 17, 2019, she is the daughter of Landau da Di Gênio, who in 2018 had 50% of his rights sold for R$ 1.26 million (R$ 1.69 million, adjusted for inflation).

Sophie Ourofino, also Landau’s daughter and therefore Viatina-19’s sister on her father’s side, was sold for R$ 1.59 million (R$ 1.86 million) in a virtual auction in 2021.

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Amazon is sued in the US for Prime subscription

Amazon was sued by the FTC (American antitrust and consumer protection body) for allegedly making it difficult to cancel your Prime subscription.

• The package, which has more than 200 million users worldwide, guarantees free shipping on products and access to movie, series and music streaming services.

The accusation: The US authority’s investigation began in 2021 and accuses big tech of using a ′′ manipulative, coercive and misleading interface ′′ to get users to automatically renew Prime subscriptions.

• She also claims that, after pressure from the entity, Amazon changed its subscription cancellation process in April 2023.

What does Amazon say: that the FTC’s allegations are “false in fact and in law” and that it is “plain and simple” to cancel a Prime subscription.

It further states that the regulator announced the lawsuit without prior notice, “in the midst of discussions with the FTC to ensure that it understood the facts, context and legal issues.”

“Iliad Flow”: is what big tech executives called the path to unsubscribe, according to the complaint.

• The term alludes to the famous Greek epic written by Homer, referring to the intentional difficulty of completing this process.

“The ‘Iliad Flow’ forced consumers who wanted to cancel the service to navigate through a four-page, six-click, 15-choice process,” the FTC said.

• “In contrast, customers could sign up for Prime with one or two clicks,” the agency said.