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Sunday, November 27, 2022
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Coup blockades lose strength, interest rate hikes in the US and what matters in the market

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3rd day of coup acts

The movement of Bolsonarista protests on the roads cooled down during the holiday and, until the end of the night of this Wednesday (2), they took place in 11 States. On Tuesday, it reached 20 states.

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Updated at 11pm on Wednesday: São Paulo, Ceará, Rio de Janeiro, Rio Grande do Sul, Maranhão, Pernambuco and Bahia cleared all roads.

  • Bolsonarista stronghold, Santa Catarina is the state with the highest number of blocks, with a total of 37. Mato Grosso follows, with 28 records so far.
  • See the status of each state here.

Why does it last so long? According to experts consulted by the Sheetmay be the result of lack of coordination on the part of public security authorities, of political interests in the electoral legacy of the defeated president or of a kind of —potentially selective — excess zeal on the part of police forces.

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The economic effects of coup blockades on highways:

  • Milk in the Trash: from this Thursday (3), at least 500 thousand liters of milk should spoil every day if the protests do not end, according to calculations by Abia (Brazilian Association of the Food Industry).
  • Gasoline shortage: until this Wednesday night, about 70% of Santa Catarina gas stations were out of fuel, according to the local dealers’ union. In the Campinas region, the local union estimated that around 80% of the stations were out of products.
  • Delays in deliveries: Mercado Livre, which runs the largest e-commerce operation in the country, needed to increase delivery times. Magazine Luiza, another giant in the sector, said it is not affected because it uses its stores as mini distribution centers.
  • Withered flowers and expensive corn: on All Souls’ Day, there were flowers because the purchases were made in advance, but the delay in delivery caused some petals to wither. At Ceagesp, the sack of corn rose from R$35 to BRL 42 in two days.

The PT calculation to readjust the minimum

PT believes that it will be able to approve the 2023 Budget in less than two months and start next year with the maintenance of the value of BRL 600 of Auxílio Brasil and also with the real increase (above inflation) of the minimum wage, two promises made by Lula (PT) in the campaign.

In numbers: increasing the aid by R$200 – the text sent to Congress provides for R$405 – would cost the public coffers around BRL 50 billion.

  • The readjustment of the minimum wage above inflation, based on GDP growth, would raise the bill by more BRL 6 billion. The minimum is used to readjust INSS pensions and other benefits.

Doing math: former governor and senator-elect Wellington Dias (PT-PI), scheduled to negotiate the Budget with Congress, told Sheetin October, that the new correction rule must consider the average GDP growth of the previous five years.

  • By this method, he stated in an interview with GloboNews that the real salary readjustment should be around 1.3% or 1.4% (which should raise the minimum to at least BRL 1,307 in 2023).
  • Bolsonaro’s budget project provides for a readjustment to BRL 1,302 in 2023, a value that should be reduced because of the recent drop in inflation.

The barrier: these new expenses do not fit into the spending ceiling, so the idea of ​​the PT and the budget rapporteur, Senator Marcelo Castro (MDB-PI), is to approve a PEC along with the Budget.


More interest and bleeding in the markets

The Fed (Federal Reserve, the American central bank) raised the country’s benchmark interest rates in 0.75 point percentage, to a level between 3.75% and 4% per year.

The size of the rise was expected by the market, but the interview with the chairman of the authority, Jerome Powell, after the announcement of the decision threw the American indices to the ground.

In numbers: the S&P500, the main index, closed down 2.9%while the Dow Jones fell 1.8%. The Nasdaq, filled with tech companies that need credit to grow, tumbled 4.2%.

  • Because of the All Souls’ holiday, the Brazilian Stock Exchange did not operate this Wednesday. In the US, the EWZ index, the main ETF for Brazilian stocks, fell 3%.

What explains: the Fed’s statement brought the signal that the rate of increase should slow down, but the indices started to fall sharply after Powell’s interview.

  • He reinforced the commitment to bring annualized inflation back to the target of 2% (in September, it reached 8.2%) and that it is premature to think about pausing rate increases.
  • “We’re going to stay the course until the job is done,” said Powell, who highlighted the strength of the US labor market as an impediment to slowing inflation.
  • Here’s why lower unemployment helps push up prices.

why it matters: in the markets, higher interest rates make American fixed income more attractive. Investors, then, tend to flee riskier assets, such as the stock market, and direct resources to US government bonds.


Disney+’s Strategy for Retaining Subscribers

Disney has announced that it will begin a “limited trial” to sell themed products on the page for certain Disney+ streaming series and movies.

Understand: Platform subscribers will have exclusive access until November 8 to a series of new products linked to franchises such as “Star Wars”, “Black Panther” and “Frozen”.

  • Items include collectible lightsabers ($250 to $400) and themed clothing ($27 to $100) that will go on sale in retail stores next week.
  • The trial period will only be available to US subscribers over 18 years of age.

What explains: Disney’s strategy is to try to attract and keep subscribers on its streaming platform in the face of a global slowdown, when consumers tend to prioritize spending and cut expenses considered superfluous.

Rival: who is also trying to achieve this goal is Netflix, whose cheaper plan with advertisements is scheduled to be made available this Thursday (3).

  • In Brazil, it will cost BRL 18.90 per month, seven reais less than the cheapest package offered today and it will be, on average, between 4 to 5 minutes of ads per hour.

In August, Disney+, Netflix’s biggest competitor in terms of subscribers, has also announced that it will have an ad-supported version, which will begin in December.

  • In her case, however, the new plan will have the current price of US$ 7.99 in the US, while the ad-free version will cost US$ 3 more.
  • The company did not detail at the time the amounts that will be charged in Brazil.

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