The benchmark index of the Brazilian Stock Exchange should run out of steam this week. At 12:21 pm this Friday (4), the Ibovespa dropped 0.24%, to 111,424 points. If the day ends at this level, there will be a weekly drop of approximately 1%. It will be the first in three weeks. The indicator continues to accumulate gains of almost 6% in 2022.
The dollar rose 0.79% to R$5.3370. Despite the daily high, the US currency was heading for the fourth week down.
The stock and foreign exchange markets started 2022 with unexpected behavior in relation to the outside world. Analysts predicted the stock market to fall and the dollar to rise. This would be the natural reaction to the expectation of higher interest rates in the main economies and the consequent reductions in liquidity and in investors’ interest in assets from countries considered risky, as is the case of Brazil.
In the midst of the sharp decline in the American market, precisely due to the rise in interest rates, however, foreigners sought temporary gains in emerging economies. This favored Brazilian assets excessively undervalued by domestic political turmoil in 2021.
Adjustments in this movement can cause falls in the stock market and rises in the dollar, as recorded this Friday, which in market jargon is called a correction.
In the United States, Friday began with upward adjustments in technology stocks a day after Meta, which owns Facebook, plunged more than 26% and dragged the main stock indexes to the bottom. Meta’s shares retreated 2% at the opening of the market this Friday.
Nasdaq was up 0.70%. The US tech stock had sunk 3.7% the day before. This is the corporate segment facing the biggest losses in the stock market amid tensions over rising interest rates. The segment is the one that most depends on credit.
The Dow Jones index rose 0.01%. The S&P 500, the benchmark for the US market, dropped 0.19%.
American interest rates should go from zero starting in March because the Fed (Federal Reserve, the American central bank) evaluated that it needs to restrict credit so that the country can stop the highest inflation in four decades.
The rise in prices gains strength with the resumption of the economy due to the advance of vaccination against Covid-19. Data on the higher-than-expected creation of jobs in January, despite the advance of the ômicron variant, reinforce the expectation that interest rates will rise.
The Labor Department reported that 467,000 jobs were created outside the agricultural sector last month. December data has been revised up to show 510,000 job openings instead of the previously reported 199,000. Economists polled by Reuters predicted the creation of 150,000 jobs in January.
“The labor market is heated and more than expected. This puts pressure on the Fed to leave its foot on the accelerator on interest rate hikes,” said Andrey Nousi, founder of Nousi Finance.
In a note, Genial Investimentos highlighted that, “in view of the change in the assessment that inflation is not transitory, but rather a permanent process linked to excess demand arising from excessively expansionist fiscal policies and bottlenecks in the production system, central banks will need to of tougher-than-expected monetary policies.
With great influence on the stock market and the Brazilian economy, oil prices started to skyrocket again this Friday. The Brent barrel, a world reference, jumped 2.62%, to US$ 93.50 (R$ 495.72).
Rising tensions between Western military powers and Russia, which deploys troops on Ukraine’s border, is one of the main factors putting pressure on the commodity. The Russians are among the main producers of oil and gas.
In addition, OPEC (an organization of exporting countries) is reluctant to increase the daily pace of production, which was already putting pressure on prices due to the recovery of the economy.
Pietra Guerra, stock specialist at Clear Corretora, also highlighted this morning that strong storms in the United States are threatening to cause new bottlenecks in the supply chain of basic materials.
Petrobras shares rose 2.53%, obviously benefiting from the rise in oil prices.
Source: Folha
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