Stock exchange renews worst mark in a year and dollar rises again

The Brazilian Stock Exchange renewed this Thursday (18) its worst mark in just over a year.

The Ibovespa, the country’s stock market benchmark, dropped 0.51% to 102,426 points. This is the worst score since November 6, 2020, when the Stock Exchange closed at 100,925 points.

The day before, the Ibovespa had already reached its worst mark since November 12, 2020.

The dollar rose 0.77% to R$ 5.5690. The American currency had its fourth consecutive high and, since last Thursday (11), it has already advanced 3.05%.

The reason for the fall of the Stock Exchange and the rise of the dollar has been the same for days: the market fears the extension of discussions on the PEC (Proposed Amendment to the Constitution) of the Precatório. The proposal depends on the approval of the Senate, which, if it decides to change the text, will need to return the bill for a new debate in the Chamber.

The PEC, which authorizes the president of Jair Bolsonaro (no party) to break the spending ceiling and default on the Union’s judicial debts in 2022, is tolerated by the market as a way out so that the government can pay the Brazil Aid and , thus, can close the Budget for the next year.

“The bad reaction is not about a technical questioning of the proposal, but the fact that you prolong the period of uncertainty,” says Camila Abdelmalack, chief economist at Veedha Investimentos.

The country’s stock market was also hurt on Thursday by the poor performance of the commodities sector.

Miners and steelmakers stood out negatively due to the drop in the price of iron ore, which was caused by the increase in stocks of the product in Chinese ports due to the low demand in the country, according to a note by Ativa Investimentos.

Vale’s shares (VALE3) fell 4.11% and were also the most traded on the floor. Usiminas (USIM5) recorded the biggest drop in the session, 5.70%, followed by CSN (CSNA3), which dropped 5.35%.

Petrobras (PETR4) fell 0.15%, despite the rise in oil prices on the international market. Brent barrel rose 1.02%, to US$ 81.10 (R$ 449.81).

The commodity’s appreciation resisted even after US President Joe Biden asked the Federal Trade Commission (FTC) to investigate whether the country’s biggest oil companies, including ExxonMobil and Chevron, are involved in “conduct potentially illegal” that results in higher gasoline prices for Americans.

Despite the rise this Thursday, the value of the barrel is far from recent highs, when the barrel hit $86 in late October, said Rachel de Sá, Rico’s chief economics.

The economist also points out that, in a virtual meeting, the day before, Biden and Chinese leader Xi Jinping discussed using their strategic oil reserves in order to alleviate pressure on energy prices.

On Wall Street, the Dow Jones fell 0.17%, while the S&P 500 and Nasdaq advanced 0.34% and 0.45%.

The S&P 500 and Nasdaq indices closed at record highs after highs and lows on Thursday, as investors focused on positive balance sheets from retailers and tech companies, which overshadowed comments from a Fed official that reinforced the possibility of raising interest rates in mid-2022.

Brazilian means of payments fintech Stone retreated 7.1% in the US market, a day after it led losses on Nasdaq with a drop of 34.6%.

Stone has accumulated losses since the presentation of the results of the third quarter, last Tuesday (16).

The company recorded adjusted net income of R$ 132.7 million in the period, a drop of 53.9% over the result of a year earlier, according to the balance sheet. Analysts, on average, expected net income of R$193 million.