Stocks full, plane travels with only luggage and what matters in the market

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full stocks

After being hit by a pandemic-induced shortage, global inventories are now filling up with products.

What explains:

• Covid trauma: With the fear of further fluctuations in supply, especially with China’s anti-covid policies, companies increased their inventories also with the forecast of a rise in consumption.

• Disincentives: the perverse combo of inflationary pressure and high interest rates affects much of the world and ends up limiting the purchasing power of consumers, which reduces the outflow of inventories.

In numbers: the inventory of 2,349 global manufacturing companies reached a record $1.87 trillion (R$ 10 trillion) at the end of March, according to FactSet data compiled by the Japanese newspaper Nikkei.

• It’s a high of $97 billion (R$ 523 billion) in relation to the previous quarter and the highest level in the historical series, which began ten years ago.

why does it matter: excess inventories are yet another blow to companies at a time of pressure on costs from all sides.

• With more products in the warehouses, storage expenses increase and prices must fall for the level of inventories to ease.

Is here? Due to their more vertical characteristics, without depending so much on what comes from outside, Brazilian companies suffer less in moments of logistical stress.

• The last industrial survey carried out by the CNI (National Confederation of Industry), in May this year, shows a small reduction in inventories compared to the previous month.

Stock market up or down? For these funds, it matters little

Investment funds with a “long and short” strategy have been able to cross the negative tide of the market this year.

Some even with positive returns between 6% and 10% in the first half of the year, as is the case of the funds of the managers Ibiuna Investimentos, XP Asset and Apex Capital. The Ibovespa fell 5.99% in the period.

Understand: the idea is to earn with shares regardless of the stock market moment. For this, managers use a strategy to buy (long) in assets in which they believe they should appreciate and sell (short) in securities that tend to depreciate.

• The tactics vary, with the purchase and sale of shares of companies in the same sector or of stock market indices, commodity contracts, etc.

More about investments:

More interest: real interest (future interest rate less projected inflation in 12 months) in the country is in the range of 8.5%. This is the highest level since the second term of former president Dilma Rousseff (PT), when she was in 9.54%.

More Risk: measured by the 10-year CDS (Credit Default Swap), Brazil risk is at its highest level since 2016. Understand how this high level affects interest rates and investments on the De Grão em Grão blog.

China is also concerned: Brazil’s main trading partner, the second largest economy in the world, has generated increasing concern in the market, writes columnist Marcos de Vasconcellos.

A flight only for suitcases

Amidst the European air chaos, the company Delta used an Airbus A330 to take 1,000 bags from London to Detroit, in the United States, with no passengers on board.

Understand: the luggage had been lost due to a technical problem at London’s Heathrow airport in early June.

• The result was a huge backlog of luggage and confusion among passengers when it came to finding personal belongings.

What explains aerial chaos: It’s a combination of heated summer demand in the Northern Hemisphere with a shortage of employees.

• A portion of those who were laid off at the height of the pandemic do not want to return to work, and many of those who are there are away for days when they are contaminated with Covid.

• The problem in London is so great that Heathrow airport has asked airlines to stop selling tickets, given the expected overcrowding for the season.

More on the airline industry:

• The first units should be delivered in 2026, with an estimated cost of US$ 3 million. In May, Eve debuted on the New York Stock Exchange and its shares have depreciated by about 20% since then.

Startup of the Week: Carbonext

The “Startup of the Week” board brings on Mondays the x-ray of a startup that recently received funding.

The startup: founded in 2010, it generates carbon credits from the preservation of millions of hectares that are at risk of deforestation in the Amazon rainforest.

In numbers: the startup announced last week that it had received a BRL 200 million in a Series B round (understand the stages of investing in startups here). The contribution was made by Shell Brasil.

What problem does it solve: with environmental preservation, Carbonext generates and sells carbon credits for companies or people who want to offset their emissions.

Why it’s featured: in addition to being the largest investment in startups announced last week in Latin America, Carbonext operates in the carbon market, a system that has been guiding the climate discussion in much of the world, but which is still in its infancy in Brazil.

More about the startup: among its clients are Buser, Uber, TIM and C6 Bank. Carbonext claims to preserve approximately 2 million hectares in the Amazon rainforest.

The week at a glance

There were six fundraising rounds carried out in Latin America, with $99.6 million (R$ 538 million) in investments. The week had the lowest number of investments announced by startups in the region in the year.

Brazil registered US$ 38 million (R$ 205 million) in three rounds, Mexico had two funding with US$ 60 million (R$ 324 million) and Chile had a contribution of US$ 1.4 million (R$ 7 ,5 million).

Data is provided by the Sling Hub platform.