The Brazilian Stock Exchange closed close to stability this Monday (8), with gains in the commodities sector masking market tension in relation to the government’s difficulty in negotiating the approval of the PEC dos Precatório.
The Ibovespa, the country’s stock market benchmark, dropped 0.04% to 104,781 points. The dollar rose 0.36%, to R$ 5.5420.
The market’s attention was turned this Monday to the discussions of the PEC (Proposal for Amendment to the Constitution) which provides for the partial postponement of payment of the government’s judicial debts.
The measure, initially criticized for opening the way to the hole in the spending ceiling, has been hailed by the market as a viable way out to accommodate the expenses that President Jair Bolsonaro (non-party) intends to create in the 2022 election year, including payment of the Brazilian Aid of R$ 400.
Investors and financial agents started to tolerate the PEC of Precatório to, according to them, avoid a bigger loss with the creation of expenses without counterparts, through provisional measures, for example.
Analysts at Clear wrote on Monday that the delay in voting heightens the risk of strengthening an alternative plan that makes room in next year’s budget to guarantee payment of aid.
“This process could involve other forms of payment outside the spending ceiling, further putting the country’s fiscal austerity in check, which reflects caution in the markets,” the brokerage wrote.
Approved in the first round in the Chamber of Deputies with only four votes more than necessary, the PEC dos Precatórios may have encountered an obstacle after the minister of the STF (Supreme Federal Court) Rosa Weber temporarily suspended the budget execution of the rapporteur’s amendments last Friday .
The instrument for distributing resources among parliamentarians, which became known as the “secret budget”, was used in negotiations for the approval of the PEC.
The Supreme will judge, in an extraordinary virtual session between Tuesday (9) and Wednesday (10), the injunction of the minister.
Members of the STF are articulated behind the scenes to prevent the court from totally prohibiting the payment of the rapporteur’s amendments, thus avoiding a direct fight with Congress and the Executive.
The expectation is that the PEC dos Precatórios is voted on in the second round in the Chamber also on Tuesday.
At the top of the list of the most traded shares of the day, Vale rose 5.44% and Petrobras rose 1.16%. Commodity sector giants thus prevented a sharper fall in the stock market.
Vale’s rise led the stock market to “zero-to-zero” in a trading session marked by declines in retail shares and other sectors linked to the domestic economy, according to Charo Alves, a specialist at Valor Investimentos.
“Vale suffered a lot last week with a 10% devaluation in the price of iron ore and, now, what we see is a correction movement with the stability of the commodity”, says Alves.
Iron ore futures contracts for January 2022 closed up 0.81% this Monday, at US$ 88.61 (R$ 492.85) a ton.
General sentiment on the raw material improved after data from China showed that export growth in the country exceeded forecasts, despite a decline in production.
The barrel of Brent oil rose 1.14%, to US$ 83.68 (R$ 465.43).
In the United States, the Dow Jones, S&P 500 and Nasdaq indices rose 0.29%, 0.09% and 0.07%, respectively.
The main Wall Street indices were mainly supported by the approval of a $1.2 trillion (BRL 6.65 trillion) infrastructure package in the United States.
After months of deadlock within the Democratic Party, the US Congress approved the package proposed by the government of Joe Biden.
One of the largest public investment plans in the country in decades, the initiative will allocate resources to modernize roads, bridges, transport, airports, railways and water, energy and internet supply networks.
The bill passed on Friday with 228 votes in favor and 206 against, with 13 Republicans voting in favor of the measure and 6 Democrats, against.
Also on Monday, Alphabet, the parent of Google, broke the US$ 2 trillion (R$ 11.1 trillion) barrier in market value for the first time, according to information from Bloomberg.
After a period of weeks oscillating between lows and moderate gains, the company’s stocks rallied on the back of growth in advertising earnings and cloud deals.
Its class A shares, which on the American market are equivalent to common shares on the Brazilian stock exchange, accumulated five sessions of highs.
Alphabet is the best performer this year among the top five US tech stocks.
In the club of companies that touched the US$ 2 trillion mark are Apple and Microsoft – which also reached the value this year.
(With Reuters)
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