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SAO PAULO – The Ibovespa closed this Thursday (30) with a drop of more than 3%, but it did not prevent the index from closing April with gains of 10.25%, with investors positively reflecting the expectations of the reopening of the large economies after hard measures of social isolation due to the coronavirus pandemic and with the hope of advancing the treatment of Covid-19.
With this, the Brazilian stock market registered its best month since January 2019, when it registered gains of 10.82%, while it was the best April for Ibovespa since 2009, when it advanced 15.55%, according to data from the consulting firm Economatica. Despite the strong appreciation in April, the index still accumulates losses of 30% in 2020.
After the market panic in March, April was marked by a start to recovery as investors assess the impacts of the coronavirus outbreak and some regions appear to have left the worst behind.
In Brazil, however, the political climate threatened to weigh on good humor, despite not erasing the month’s strong gains. In particular, Ibovespa suffered the resignation of former Health Minister Henrique Mandetta, but in particular the departure of Sergio Moro from the Ministry of Justice last week.
At the time, the stock market fell more than 5%, and investors fear that the next to exit could be Paulo Guedes, who has calmed down in recent days, but also due to Moro’s complaints of an attempt by Bolsonaro to interfere with the Federal police.
The exchange on Thursday
This Thursday (30), the Ibovespa closed with a fall of 3.20%, to 80,505 points, 6.87% more in the week, driven by the sharp fall in the shares of banks, especially Bradesco, which collapsed around 7% after disclosing its result, plus Vale’s nearly 4% decrease (click here and see the highlights of the actions).
Meanwhile, the commercial dollar rose 1.55%, quoted at R $ 5.4363 when buying and R $ 5.4380 on sale, closing the month with an appreciation of 4.7%. The future dollar for May, in turn, advanced 1.71%, to R $ 5,427.
In the future interest market, the DI for January 2022 fell 4 basis points to 3.62%, while the DI for January 2023 increased 3 points to 4.80%. The contract for January 2025 advanced 3 basis points at 6.50%.
For the Levante analysis team, the broad scenario remains positive, but today’s session was affected by a combination of negative factors, which ended by dropping the index.
Among the numbers that impacted the market today, in addition to the weaker economic indicators abroad and in Brazil, the drop in Bradesco’s earnings, a profit realization after three consecutive sharp increases and the vacation this Friday, placed investors in a climate of caution. and heavy on the stock market. “In this scenario, the day is negative for the Stock Market, however, the positive outlook remains solid,” said Levante.
Outside, the day was a fall, but also positive records on Wall Street. The Dow Jones and S&P 500 indices fell 1.17% and 0.92%, respectively, on Thursday, but posted their best months since 1987, advancing 10.5% and 12.8% in April.
Economic indicators
One of the most anticipated data for the day, the number of unemployment applications in the US. USA Last week it hit 3.84 million, and despite the drop from the previous week, it was slightly above the average expectation of economists compiled by Bloomberg, which targeted 3.5 million orders.
As a result, the total number of claims for unemployment benefits in six weeks, since the start of the new coronavirus crisis, has exceeded 30 million. Orders in the week ending April 25 reached their lowest level in a month, after reaching their highest level in the week of March 28, when they reached a record of 6.87 million.
Meanwhile, the US personal income in March fell 2%, compared to a projection of 1.7%, while consumption fell 7.5%.
Here, data from the Continuous National Household Sample Survey (Pnad), published by the Brazilian Institute of Geography and Statistics (IBGE), showed that the unemployment rate in the country increased to 12.2% in the quarter ended in March, reaching 12.9 million people and already showing the initial impact of the coronavirus pandemic on the country’s labor market.
The expectation, according to the Bloomberg consensus, was that the unemployment rate in Brazil would accelerate to 12.5% in March, compared to 11.6% in the moving quarter through February.
In Europe, Eurostat reported that the European Union economy contracted 3.8% in the first quarter of 2020, the worst result since 1995.
The drop in the GDP of the European bloc occurred due to the advance of the coronavirus epidemic, which led to the interruption of services, the closure of trade and quarantine measures in Italy, Spain, France, Belgium and Germany. Meanwhile, the unemployment rate rose to 7.4% of the workforce in March.
The European Central Bank (ECB), on the other hand, decided to keep major interest rates unchanged amid the region’s deep economic crisis, and also said it is ready to step up its stimulus program if necessary.
The ECB has already implemented a massive stimulus package to mitigate part of the economic shock. In March, the central bank began buying government bonds as part of a € 750 billion package and cut bank costs to support lending activity.
Politics
President Jair Bolsonaro disqualified the Federal Attorney General’s Office (AGU) last night, which previously stated that he would not appeal after STF Minister Alexandre de Moraes suspended the appointment of Alexandre Ramage to the Directorate General Federal Police Bolsonaro, after to swear in the Minister of Justice to the lawyer André Mendonça, a friend of the president’s children, said that “I am in charge and I want the damage there.”
According to the agent, it is the AGU’s duty to appeal against the STF’s decision. Previously, Minister Alexandre de Moraes declared in his decision “non-compliance with the constitutional principles of impersonality, morality and public interest” by prohibiting the possession of Ramage, according to the newspapers O Globo and Folha de S. Paulo.
Even on the political radar, a positive point for the market is the rapprochement between Maia and Guedes, according to the newspaper O Estado de S. Paulo. According to the Estadão column, the minister and the mayor recently spoke again, but coldly and by message. The allies of both seek to organize a meeting, arguing that the disagreement between Guedes and Maia complicates the path of vital guidelines for the country, especially economic ones, such as the project to help the States.
Corporate news
Bradesco recorded a recurring net income of R $ 3,753 billion in the first quarter of 2020, a decrease of 39.8% compared to the same period last year, amid the provision of R $ 2.7 billion for absorb losses with the increase in defaults expected with the coronavirus crisis. The accounting profit was R $ 3,382 billion, 41.9% less.
Companhia Energética de São Paulo (Cesp) published a balance sheet and reported that it had a net profit of R $ 53.8 million in the first quarter of 2020, reversing a loss of R $ 158.2 million in the same period in 2019. Cesp He says he has returned profit after taking various management measures, reducing the cost of purchased energy by 63%.
Multiplan, one of the largest managers of shopping centers in Brazil, also published quarterly results. The company reported net income of R $ 177.7 million in the period, an expansion of 93% in the same quarter of 2019. Although the results were affected by the coronavirus epidemic, Multiplan detailed that they only occurred from 18 March with the closure of all shopping centers. Tenants had a more than 11% drop in sales in the first quarter.
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