Record indebtedness, wave of layoffs in startups persists and what matters in the market

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Household debt hits record

The indebtedness and default of Brazilian families rose again and hit a record in July, according to a monthly survey by the CNC (National Confederation of Commerce in Goods, Services and Tourism).

In numbers: 78% of families are in debt, a rise of 0.7 point percentage compared to June. The share of households with overdue bills is 29%advance of 0.5 point compared to the previous month. The numbers are the highest since the survey began in 2010.

• Both families with incomes above ten times the minimum wage and those that receive less than this level saw their indebtedness grow last month, with increases of 0.8% and 0.6%respectively.

The record indebtedness it comes at a time when the government is trying to expand the supply of credit to low-income Brazilians in a context of expensive loans due to high interest rates.

• THE Sheet showed that a loan of BRL 3,046.54, almost five times the value of the new Auxílio Brasil of BRL 600, can turn into a debt of BRL 5,760.

This Monday (8)President Jair Bolsonaro (PL) asked at lunch with bankers that the interest charged on the payroll loan be reduced by financial institutions.

• Isaac Sidney, president of Febraban, said at the meeting that the view that banks like high interest rates because they earn more is wrong. According to him, low interest and inflation scenarios generate lower default rates.

Loggi lays off 15% of employees and changes command

Loggi, a parcel delivery startup, announced this Monday that it has laid off around 15% of its 3,600 employees.

The company also announced an internal restructuring: the current CFO, Thibaud Lecuyer, assumes the presidency of the company in place of Fabien Mendez, co-founder of Loggi, who will assume the post of chairman of the company’s board.

What explains: it is yet another case of mass layoffs in unicorns (startups valued at $1 billion or more) against a backdrop of rising global interest rates and reduced liquidity for venture capital.

In the specific case of Loggi, the company also feels the brake on ecommerce orders after a shopping boom generated by the pandemic. The end of restrictions, accelerated inflation and more expensive credit impact on the deceleration of the sector.

The company said in a statement that “the reduction of its headcount is part of a set of actions to increase operational efficiency taken in the last six months to adapt the company to the new global scenario and ensure the sustainability of the business”.

sour weather: This Monday, the Japanese fund Softbank, one of the largest funders of startups in the world, posted a record quarterly loss of $23 billion (R$ 117.9 billion) with the fall in shares of technology companies in which it invests.

• Masayoshi Son, president of the fund, said the sector’s “winter” could last longer if unicorns continue to refuse investment offers that value the company at a lower level than the values ​​that were practiced before the crisis.

Corn export deal could put pressure on prices

A possible settlement for Brazilian corn imports by China in 2022 could pressure domestic cereal prices in Brazil, with an impact on the meat industry and on items consumed by the poorest.

Understand: Brazilian corn exports to the Chinese are currently non-existent due to phytosanitary and transgenic reasons, but an agreement to allow the vessels is close and could happen later this year, according to Reuters.

• The opening of the Chinese market to Brazilian cereal could reduce the supply of the cereal here, raising prices.

• According to experts heard by Reuters, China’s interest in the Brazilian product is justified not only because it is an alternative to Eastern European cereal, but would be a way for the country to become less dependent on US corn.

why does it matter: corn is used as feed by the animal slaughtering industries, a sector that felt pressure on costs with the crop failure in Brazil in 2021.

• Since the beginning of 2019, cornmeal prices have risen by 77%well above the average inflation for the period, which was 28%.

Stock exchange hits 5th consecutive high, and dollar returns to June

The stock market and dollar indicators in Brazil this Monday maintained the good moment of the last few days in a session marked by the 5% rise in Petrobras shares.

in numbers: the Ibovespa advanced 1.81%, at 108,402 points, and closed higher for the fifth session in a row. The price of the American currency fell by 1.06%, to BRL 5.11the lowest since June 15.

What explains: this “mini rally” of the Brazilian stock exchange is marked by a general feeling in the market that the end of the cycle of high interest rates here is near.

• This understanding led to a movement to buy shares of companies linked to consumption and that had been more penalized during the rise of the Selic in the first half.

this mondaythe firing of 5.05% of Petrobras preferred shares was motivated by a set of factors:

• Higher oil prices (1.30%), signing of a contract to guarantee the supply of gas to the Bolivian market and the positive impact of record dividends announced last week.

More about stock exchange companies:

Itaú Unibanco recorded net income of BRL 7.679 billion in the second quarter of 2022, an increase of 17.3% compared to the same period of 2021 and 4.3% compared to the previous quarter.

The loan portfolio totaled BRL 1.084 trillion at the end of June, an increase of 19.3% in annual bases, and of 5% in the quarterly comparison. Delinquency above 90 days reached 2.7%against 2.3% in June 2021, and 2.6% in March this year.