Stock closes the week in the blue, but falls on the day with weak services and retail

The Stock Exchange closed this Friday (12) down 1.17%%, at 106,334 points, driven by the weakness in the performance of the services and retail sectors, in addition to a battery of disappointing results from companies in the final stretch From this week.

The result of the day did not prevent, however, the country’s stock market from presenting its second consecutive weekly high, still boosted by the approval by the Chamber of the PEC (Proposal of Amendment to the Constitution) of the Precatório. The Ibovespa, the Stock Exchange’s benchmark, ended the week with a gain of 1.44%. In the year, the indicator accumulates a drop of 10.66%.

The dollar closed this Friday at a high of 0.99%, at R$ 5.4580. In the accumulated result for this week, however, the American currency had a devaluation of 1.16% against the real, also reflecting the reduction in the perception of fiscal risk due to the PEC dos Precatório.

Despite authorizing a default on the Union’s judicial debts and breaking the spending ceiling for President Jair Bolsonaro (no party) to expand Brazil Aid in the year in which he will run for re-election, the PEC is now accepted by the market as a lesser fiscal threat than the increase in expenditures through an interim measure and without counterparts.

At the end of last month, when the government revealed its plan to circumvent the spending ceiling to expand social benefits, the weekly result of the Stock Exchange plummeted 7.28%, dropping from 114,648 points to 106,296 between 15 and 22 October.

“What was repulsive has become attractive,” commented Nicolas Borsoi, chief economist of Nova Futura. “The Precatório PEC, whose announcement displeased the market, led to an improvement in local assets and the confusion of analysts after its approval,” he said.

This Friday, after starting the trading session at a high, the Ibovespa adopted a downward bias with the repercussion of the announcement by the IBGE (Brazilian Institute of Geography and Statistics) on the 0.6% decline in the volume of the services sector in September. There was an expectation of a 0.5% increase.

“The tertiary sector [comércio e serviços] it is very important because it represents around two thirds of economic activity”, says Lucas Carvalho, an analyst at Toro Investimentos.

In the annual comparison, the sector grew 11.4%, but it was also below the 13.5% expected by analysts. “The robust advance in the annual comparison is due to the extremely depressed reference base last year, a reflection of the mobility restriction imposed by the pandemic in 2020”, highlighted Guilherme Sousa, economist at Ativa Investimentos.

On Thursday (11), the IBGE informed that the volume of Brazilian retail sales in September dropped 1.3% compared to August, the highest for the month in the historical series started in 2000.

Quarterly company results released on Thursday also hurt the stock market’s performance on Friday.

Grupo Natura’s shares (NTCO3) tumbled 17.54%, losing R$9.7 billion in market value. Analysts attribute the drop to the quarterly result considered weak in relation to market expectations and the revision of performance estimates, which ended up overshadowing the disclosure of the cosmetics manufacturer’s plans to list its roles in the United States.

Magazine Luiza (MGLU3) shares sank 18.32%, representing a devaluation of R$ 16.7 billion. The stock’s slump came after the company reported a slowdown in sales in the third quarter, when it saw a nearly 90% dip in year-over-year net income.

Embraer’s common shares (EMBR3) fell 4.44% due to news that the FAB (Brazilian Air Force) unilaterally reduced the order for Embraer’s KC-390 military freighters.

FAB’s unprecedented act exposed the institution’s discomfort in its 52-year relationship with the company, opening an unprecedented crisis.

Petrobras’ preferred shares (PETR4) rose 2.04%, despite the drop in oil prices on the international market. The barrel of Brent retreated 1.06%, to US$ 81.99 (R$ 444.32).

Vale (VALE3) obtained a gain of 0.43%. The day before, spot iron ore contracts traded at the port of Qingdao, in China, advanced 3.36%.

The country’s mining and steel industry took relief this week with the payment of a debt owed by Chinese developer Evergrande, allaying fears of default in the main market for Brazilian companies in the sector.

In the United States, the main stock indexes showed consistent gains this Friday. Dow Jones, S&P 500 and Nasdaq advanced 0.50%, 0.72% and 1.00%, respectively.

(With Reuters)