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SAO PAULO – On a bank holiday in Tiradentes in Brazil, in which B3 will be unlisted, the main ADR index (in practice, the shares of companies outside the US that are listed in New York) in Brazil operates with a sharp drop in York Stock Market (NYSE) stocks, following the bad mood seen in the US and European indices amid the unprecedented drop in oil prices.
The Dow Jones Brazil Titans 20 ADR fell 3.03% at 11:13 am GMT to 11,770 points, again posting stronger losses after relaxing at the open. The EWZ iShares MSCI Brazil Capped ETF, which replicates the Ibovespa in dollars, lost 3.41% to $ 24.07.
The WTI oil contract expiring in June registered a sharp drop of 27.56% during the morning, to US $ 14.80 per barrel, while Brent had a loss of 22.41%, to US $ 19.84. Brent, a benchmark for Petrobras and businesses in Brazil, posted its lowest level since December 2001. This leads to a significant decrease in Petrobras ADRs that are traded on the New York Stock Exchange: PBR and PBR assets- A, equivalent to the ON and PN shares, fell about 4%.
The day before, the contract for the US WTI barrel of oil for May, which expires on Tuesday (21), ended last Monday (20), trading at a negative price for the first time in history.
The WTI contract for May collapsed 305.9% yesterday on the New York Stock Exchange and closed at $ 37.63 negative, which means that producers would effectively pay traders to remove the oil from their hands. This morning, the contract showed a recovery and rose more than 107.47%, returning to positive territory, with the barrel quoted at US $ 2.81.
However, as contracts get closer to expiration, the trading volume generally shrinks. Therefore, long-term contracts may be more indicative of how Wall Street views the price of oil.
The strong bearish movement in the product reflects the market perception that the cut of 9.7 million barrels per day announced last week by the Organization of Petroleum Exporting Countries and allies (OPEC +) will not be enough to cope with the fall. of global demand due to the economic impacts of the coronavirus, of approximately 30%.
United States President Donald Trump said on Twitter that the government is working on a plan to make capital available to the country’s oil industry in order to prevent job losses after prices drop below freezing.
Amid the sharp drop in oil, the session will again be negative for the world stock markets: the S&P 500 fell 2.04%, the Nasdaq fell 1.79%, while the Dow Jones registered a decrease of 1, 85% It is worth mentioning that the President of the United States announced that he will sign an executive order to temporarily suspend immigration to the country in the midst of the Covid-19 pandemic.
Still on the American radar, the U.S. reopening plan, released by the president, requires massive evidence from the population, yet the governors say they don’t have a structure to do it. The ability of the United States to test for coronavirus “falls short of an adequate level to facilitate social distance measurements,” said Leana Wen, a professor of public health at George Washington University.
On the indicator agenda, the sale of used residential properties in the country fell 8.5% in March in the monthly comparison and stood at 5.27 million, compared to an estimate of 5.25 million, according to the Association United States National Brokers. Estimates ranged from $ 4.00 million to $ 5.89 million, according to the Bloomberg consensus.
European stock exchanges also recorded a day with losses above 2%: Dax fell 3.21%, FTSE fell 2.45%, while CAC and FTSE MIB had respective decreases of 2.94% and 2.51%.
In Asia, the Japanese Nikkei fell 1.97%, Shanghai fell 0.90%, while Hang Seng lost 2.20%. In China, even with the country starting to resume activity, analysts remain cautious about this process, and Nomura projected yesterday that China’s Gross Domestic Product (GDP) fell 0.5% in the second quarter, with a slower recovery. than the previous year. expected.
Shares in Australia, meanwhile, fell, with ASX closing 2.46%. The Australian Central Bank minutes for the April meeting, released on Tuesday, showed that “the Council remained committed to supporting jobs, incomes and businesses” as the country responds to the coronavirus outbreak. In the minutes, members also noted that “Australian banks are in a strong position to withstand the great economic shock” of the Covid-19 outbreak and the volatility of the financial market.
Also pay attention to South Korean assets: the currency won fell 0.74% against the dollar, while the Kospi index fell 1%. Since last night, rumors in the American press have gained momentum that North Korean dictator Kim Jong-Un is in serious condition after cardiovascular surgery.
This morning, an official statement from the South Korean government dismissed rumors that the North Korean leader was in critical health. According to the statement, released Tuesday, the South Korean intelligence service does not detect “any different activity” in Pyongyang, the capital of North Korea, and there is no report on the dictator’s health. Kim is “ruling normally,” he said.
On the Brazilian corporate radar, however, attention to changes in the Boards of Directors. Michael Klein will resign as chairman of the board of directors of Via Varejo (VVAR3), the company said Monday night. Reinsurer IRB Brasil Re (IRBR3) also announced changes. Based on the resignation of executives appointed by the company’s shareholders such as Bradesco and Itaú Unibanco, with the help of consulting firm Korn Ferry, he selected new members, including former S&P Regina Nunes, as well as specialists in the areas of insurance, accounting and corporate governance. .
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