Market bets on slowing inflation and stock market rises for the second week

The Ibovespa index, a reference for the Brazilian Stock Exchange, rose 1.38% this Friday (10), closing the day at 107,758 points. It is the second consecutive weekly high. The gain in December reached 5.71%, but in the accumulated result for 2021 there is a loss of 9.46%.

The release of official inflation with a lower-than-expected high and concentrated in the transport sector gave the positive direction to business this session.

The dollar rose 0.69% to R$5.6140. The renewal of high inflation in the United States reinforced for the exchange market the idea of ​​monetary tightening in the American economy and, consequently, the appreciation of the country’s currency.

The pressure on the exchange rate was partially contained by the intervention of the BC (Central Bank), which sold US$ 687 million (R$ 3.8 billion) in a spot currency auction this Friday. This was the first operation of its kind since October 19 this year.

Compared to last week’s close, the dollar fell 1.10%.

After taking a fright at the warning tone about inflation in the statement of the Copom (Monetary Policy Committee) of the Central Bank, investors celebrated the data of the IPCA (Extended National Consumer Price Index) released on Friday.

Despite the 0.95% increase in November representing the highest rate for the month since 2015 (1.01%), the result came below expectations of 1.10%.

More important than the indicator, however, is the fact that the rise stopped spreading to various sectors of the economy, according to Fernanda Mansano, chief economist at the TC investment platform.

Mansano highlights that inflation was concentrated in the transport group, which accounted for more than 70% of the November index. This signals to the market that there is no uncontrolled price rise.

“Inflation seems to be more concentrated in points that are impacting the whole world, such as fuel prices,” he says.

One of the main signs of relief regarding inflation is the rise of the retail sector, according to Alexsandro Nishimura, economist at the BRA investment office.

“Retailers rose with the alleviation of the perverse combination that has been penalizing the sector in recent months due to the deterioration of the macro scenario, which includes inflation and rising interest rates,” he said.

The interest rate on DI contracts (Interbank Deposits) maturing in January 2023 dropped by 0.19 percentage point, to 11.43% per year.

Magazine Luiza’s shares rose 1.27% and led the negotiations among the securities with the highest volume this Friday, surpassing Petrobras and Vale, which rose 1.09% and 0.76%, in that order.

The biggest hikes of the day came from Banco Pan (16.17%) and Méliuz (16.12%).

Wall Street Advances Despite Highest Inflation in Nearly 40 Years

The US Department of Labor reported that the country’s consumer price index increased 0.8% in November from the previous month, gaining 6.8% in 12 months, the most significant increase since 1982.

Felipe Steiman, commercial manager at B&T Câmbio, pointed out that high inflation in the United States reinforces expectations of acceleration in the pace of cutbacks in stimuli and possible anticipation of interest rate increases.

Inflation in the United States has been pressuring the appreciation of the dollar against the real. The foreign exchange market assesses that the escalation of prices could influence the monetary policy decision of the Fed (Federal Reserve, the US central bank), to be announced next week.

In the American stock market, the release of inflation in line with expectations allowed the main indices to end the day in the blue.

Dow Jones, S&P 500 and Nasdaq rose 0.61%, 0.95% and 0.73%, respectively.

The barrel of Brent oil, global reference, advanced 1.29%, to US$ 75.38 (R$ 418.79).

with Reuters