High interest rates in Brazil and the US, Tesla accidents and what matters in the market

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More interest comes around

The central banks of Brazil and the US raised benchmark interest rates this Wednesday (15th) and indicated an even stronger monetary tightening compared to what was considered a few weeks ago.

In Brazilthe BC Copom increased the Selic by 0.5 point percentage (pp), for 13.25% per year, in line with market expectations.

• The monetary authority also signaled that it expects a new high of the same or smaller size for the next meeting.

• Since the last meeting, the BC had indicated the possibility that this Wednesday’s advance would be the last, but the decision was reversed with expectations and inflation data released in recent weeks.

What explains: as the monetary policy decision takes six to nine months to reach economic activity, the BC dropped this year’s inflation, which should come well above the target ceiling (5%), and is eyeing next year’s IPCA , where the target is 3.25%.

• In the latest Focus survey of market forecasts on June 6, analysts projected 2023 inflation in 4.39%well above the target, leading the BC to report a new high to try to control expectations.

In the USAthe Fed’s Fomc raised the country’s benchmark interest rate by 0.75 pp., for an interval between 1.5% and 1.75% per year.

• A rise of this size in one shot has not happened since 1994, and it only came to be considered as more likely by the market after the American inflation data released last Friday.

• Fed Chair Jerome Powell said the committee should opt for a new high of 0.75 percentage points or 0.5 percentage points at its next meeting.

Opinion:

How are the investments?

The new Selic high makes investments in fixed income more attractive, which for the most part should gain from inflation in the next twelve months – the exceptions are for savings and CDBs of large banks, according to a projection by the search engine Yubb.

In numbers: the incentivized debentures, for having income exempt from income tax, lead in the ranking of real profitability (return minus projected inflation at 8.89%), with 5.6% per year.

• LCI titles (4.03%) and LCA (3.67%), also without incidence of IR, follow.

• Among the main fixed-income securities, savings, whose yield did not change with the rise in the Selic rate (see here), has a real yield of -2.5%.

Most expensive loan: consumers who are going to finance a car worth R$40,000 today pays the equivalent of two PlayStation 5 consoles (R$11,000) more in credit compared to what they would spend with Selic at 2% per year, in March 2021 .

• See here how are other fees, such as credit card revolving and bank loans.

And the bag? Specialists recommend some participation in stocks, but reinforce long-term vision and the stomach to withstand the volatility of a market alert to the risk of recession in the economies.

• This Wednesday, the Brazilian stock market finally closed higher after eight negative trading sessions in reaction to the increase in US interest rates as expected. Ibovespa rose 0.73%to 102,806 points, while the dollar fell 2.06%, the BRL 5.03.

Luiza Trajano leaves Forbes list

The fortune of Luiza Trajano, chairman of the board of directors of Magazine Luiza, fell to less than $1 billion (R$ 5.1 billion), according to Forbes magazine, which removed her from its list of billionaires.

In numbers: according to the magazine, the businesswoman’s assets had been falling since July 16, 2021, when she reached the record of $5.6 billion (R$ 28.6 billion, in current values).

• In December 2021, it had shrunk to US$ 1.4 billion (R$ 7.1 billion), in a devaluation of 75%or US$ 4.2 billion (R$ 21.5 billion), in six months.

What explains: as most of Luiza Trajano’s assets are in Magazine Luiza shares, a company in which she owns 17%her fortune varies according to the rise and fall of the company’s shares.

• In addition to the negative global scenario for the Stock Exchanges this year, Magalu’s shares have been suffering more than average because it belongs to the retail sector.

The Brazilians on the Forbes list:

• Lucia Maggi and family (Amaggi Group) – US$6.8 billion (BRL 34.8 billion)

• Maria Helena Moraes and family (Votorantim Group) – $4 billion (R$ 20.4 billion)

• Ana Lucia Villela (Itaúsa – parent company of Itaú) – US$ 1.5 billion (BRL 7.7 billion)

• Dulce Pugliese by Godoy Bueno (Amil) – US$ 1.4 billion (BRL 7.1 billion)

• Neide Helena de Moraes (Votorantim Group) – US$ 1.3 billion (R$ 6.6 billion).

Tesla reports 273 Autopilot accidents

Tesla has reported 273 accidents involving its vehicle driving assistant systems since July last year. The number is higher than any other automaker, according to the US auto safety agency.

Yes but… The American authorities point out that accidents do not follow a registration pattern among automakers and, therefore, the data should not be compared.

• Tesla stands out for collecting a massive amount of high-quality data, the agency said.

in numbers: Of the 392 accidents reported by a dozen automakers since July, six resulted in fatalities and five seriously injured.

Autopilot: The US auto safety agency is investigating and may demand a recall of 830,000 Tesla vehicles equipped with the automaker’s system that steers, accelerates and brakes a car alone.

• He has been involved in accidents with stopped emergency vehicles, and 14 fatalities have been reported in cars with Autopilot on.

• Tesla claims that the system requires constant driver attention and does not drive cars alone. Unlike other brands, however, Elon Musk’s company does not have an effective mechanism to prohibit drivers from taking their hands off the wheel for too long.