The Brazilian stock market achieved its third consecutive rise this Thursday (10), even after the release of data that reinforced the acceleration of inflation in the United States. The rise in prices there should result in higher interest rates and, consequently, higher yields on US Treasury bonds. This, in theory, reduces the interest of investors in investments in emerging countries, such as Brazil. But that’s not what’s happening.
The Ibovespa closed up 0.81%, at 113,367 points. The Brazilian market benchmark adds up to 8.15% gains in 2022.
In the exchange market, the real did not resist the pressure and ended up losing value against the dollar. The American currency rose 0.26%, to R$5.24, after having spent most of the day in decline. In the accumulated this year, however, the foreign currency is in fall of 6%.
Different from what was expected by analysts for this year, foreign investors are taking risks in the Brazilian market, even in the face of the expectation that the Fed (Federal Reserve, the American Central Bank) will take its interest rate from zero starting in March.
These investors have realized that with the Brazilian real and shares of Brazilian companies excessively discounted, Brazil brings profit opportunities as the US stock market undergoes a correction.
This Thursday, the Ibovespa was also favored by another day of highs for companies in the commodities sector.
With iron ore rising due to expectations of growth in construction in China, Vale’s shares closed up 2.69%.
Despite the 0.23% drop in oil in this session, the price of a barrel of the Brent type remains at the highest level since 2014, quoted at US$ 91.34 (R$ 475.83). Petrobras shares rose 1.53%.
There is also an advantage in Brazil for investments in fixed income. With a basic interest rate of 10.75% per year and annual inflation forecast at 5.4%, the country is among those that offer the most advantageous real interest rates on the planet.
In the United States, the day was one of heavy casualties. The Nasdaq tech stock plunged 2.10% and took the S&P 500 with it. The benchmark for New York-traded stocks fell 1.81%.
Companies listed on Nasdaq have great growth potential, but depend on credit to make investments possible. If interest rates are confirmed, these companies will have their operating costs increased. This represents a potential drop in investor profits.
Pessimism also affected the largest US companies on Thursday. This is revealed by the 1.47% drop in the Dow Jones index, which follows some of the most solid companies in the country.
Although the Fed has not yet started raising interest rates nor has it announced the size and speed of the credit crunch, after yet another rise in inflation, analysts have little doubt about the US monetary authority taking more aggressive measures. .
“This puts more pressure on the Fed to keep its foot on the accelerator of rate hikes,” said Andrey Nousi, founder of Nousi Finance.
“The Fed is expected to take a tougher stance on the escalation of interest rates. Until then, it was already slightly understood that a rise of 0.25 percentage point would occur. Now, the market is almost certain that the increase will be 0.50 percentage point”, commented Felipe Izac, partner at Nexgen Capital.
US consumer prices rose solidly in January, with the biggest annual rise in inflation in 40 years.
The consumer price index rose 0.6% last month, after rising 0.6% in December, the Labor Department said on Thursday. In the 12 months through January, the index jumped 7.5%, the biggest annual increase since February 1982, and after an increase of 7% in December.
The jump marks the fourth consecutive month of increases of more than 6% on an annual basis. Economists polled by Reuters predicted a 0.5% rise for the index in the month and a 7.3% increase on an annual basis.
In Europe, the Euro Stoxx 50 index, which tracks the performance of the shares of 50 of the region’s largest companies, closed down 0.17%. The Paris Stock Exchange fell 0.41%, while London and Frankfurt rose 0.38% and 0.05%, respectively.
with Reuters
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