Fiscal policy after election worries managers, games feel hungover from the pandemic and what matters in the market

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Managers worried about tax after elections

The concern of fund managers about Brazilian fiscal policy after the elections has increased considerably in relation to the last month, according to a Bank of America survey released this Tuesday (16).

The survey also shows that experts are more optimistic about the Brazilian stock exchange for the end of the year after the rally in asset prices observed in recent weeks.

In numbers:

• Post-election fiscal policy: more of 60% said they were concerned about the health of public accounts from 2023 onwards, an increase in relation to 40% of the July survey.

• Research impact: 75% of managers expect election polls to impact asset prices. In July, this share was slightly below 70%.

• Election concerns: more of 60% of responses were that they are not worried, above the number of about 45% determined in July.

• Tax status this year: the fear has subsided and reaches about 20% of the managers. In July, there were more than 40%.

• Estimate with Ibovespa: In August, 80% of those who responded see the Brazilian stock exchange index above 110 thousand points at the end of the year. In July, they were just 45%.

More on Stocks and Investments:

• The shares of Brazilian fintechs Nubank and Banco Inter soared on the American stock exchanges this Tuesday (16) after the disclosure of their results. Nubank had a high of 17.9%while Inter saw their shares rise 9.7%.

Poor feel more inflation

The difference between the inflation of the richest 10% and the poorest 10% reached 0.69 point percentage in July, the highest value since December 2020, according to FGV.

In numbers: families in the range of 1 to 1.5 minimum wages had deflation of 0.36% last month, while those with income between 11.5 and 33 minimums felt a fall in prices of 1.05% — practically triple.

• In 12 months, FGV’s CPI accumulates a high of 7.82% for the poorest and 7.43% for the richest.

What explains: the difference lies in the dynamics of the price increase in the last month and how it affects the population differently.

• Food inflation has greater weight in the pockets of the poorest and accelerated in July, a phenomenon that was also observed at the end of 2020.

• On the other hand, there is a drop in inflation in transport, education and recreation, which consume a larger share of the budget of the high-income.

August should also have deflation: the IPCA should end the current month down, as happened in July.

The price decline was projected at 0.20% by the market in the last week, but it should be even greater after the new cut in the price of gasoline announced by Petrobras on Monday (15).

More on gasoline price:

Even after the reduction, the fuel in the country is still traded above the import parity, according to Abicom (importers association). That is, there is scope for further cuts, if oil and the dollar remain at their current level.

The price of a liter of milk has climbed in recent months and is already more expensive than gasoline in cities like São Paulo, research indicates.

Games feel hungover from the pandemic

The euphoria of the pandemic for the games market seems to have come to an end.

After a strong expansion in 2020 and 2021, results from producers and console manufacturers show a drop in user demand, even if it is higher than pre-pandemic.

What explains: the end of restrictions took people out of the house, and games began to compete with other forms of entertainment. There is also the impact of inflation, which leads consumers to rethink their spending and cut non-essential items.

• Aspects related to the dynamics of the sector also weigh in on, such as the smallest launch this year of major games, which usually boost sales.

Are Games Immune to the Recession? This impression gained strength in the second half of the 1990s and the beginning of the 2000s, when the sector was growing strong and the crisis was not felt much, explains Tiago Ribas in this week’s edition of Combo, the games newsletter by Sheet (register here).

• Today, this market is more consolidated. Although companies have shown double-digit growth at the height of the pandemic, the trend from now on is a more timid, but still consistent, increase.

Numbers that prove the slowdown:

• Consumer spending on games will be $55.5 billion (R$284.9 billion) in the US in 2022, 8.7% less than last year, according to the NPD office.

• Between April and June of this year, Nintendo recorded a decrease of 23% in the sale of consoles and 8.6% in gaming compared to the same period of the previous year.

• Microsoft had a drop in hardware sales 11% it’s from 6% in software, while Sony even saw an increase in 4% in PlayStation 5 sales, but retraction of 26% in selling games for PS4 and PS5.

Victims of alleged pyramid ask for R$ 7 billion in court

A group of victims of a scam that promised returns of up to 7% per month from the purchase and sale of bitcoins seeks compensation for BRL 7 billion of the Atlas Quantum company.

The public civil action was proposed by IPGE (Institute for the Protection and Management of Entrepreneurship).

The process: the group accuses the company of crimes against the financial system and the practice of financial pyramiding.

• Victims claim that Atlas and other companies linked to it kidnapped customers about BRL 4 billion in crypto assets and also ask for 40 minimum wages as compensation to each of those who were harmed.

• It is estimated that there are 39 thousand customers in Brazil and 200 thousand all around the world.

wanted by Sheet since the last 5th, Atlas Quantum has not responded to emails and the telephone numbers provided on the internet do not work. The law firm that assists the company in court declined to comment.

How Atlas Quantum worked: the company promised arbitrage (buying and selling bitcoins) through a unique robot called quantum. She even promoted her services in advertisements on open TV.

• In the contracts, customers were offered a return of 1% to 6% of the amount invested. Payment was honored at first, sustained with the entry of new investors, as in a financial pyramid scheme.

• Everything came crashing down in 2019, after the CVM found signs of irregularities and banned new business. Customers then tried to withdraw their funds, which they have not been able to do to this day.