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The announcement of the Citizen Income penalized the Brazilian stock market, which registered the lowest level since June 10 and did not agree with the practically generalized resumption abroad. The negative tone came from the fact that the new social program was not accompanied by a cut in spending, but rather by a reallocation of resources. Therefore, the instability of public accounts remains. Stress was also strong on long-term interest, which reflects the value (“valuation”) of listed companies.
- The dollar soars with the reaction to the Citizen Rent proposal and forces the action of BC
After adjustments, the Ibovespa closed with a fall of 2.41%, at 94,666 points. In the morning, the index reached a maximum of 98,314 points (1.36%), in line with the foreign market and supported by the actions of the banking sector. However, immediately after the announcement of the program by the government, the index turned negative to the low of the day, at 94,371 points (-2.71%).
The financial volume totaled R $ 22.07 billion, above the September daily average, R $ 19.6 billion, and in 2020, R $ 20.6 billion.
The performance of the Brazilian stock market was quite different from that of the foreign market and precisely because of fiscal risk, which has been in the market since mid-August.
“Today was an emblematic day, with technical recovery abroad, all emerging countries with a good performance, except Brazil. And there was even more stress on the exchange rate ”, says Jorge Oliveira, partner and manager of equities at BlueLine Asset, reiterating that it is exactly the political and fiscal risk that leaves the manager in a cautious position with the stock market Brazilian, with only about 2.5% of the resources of the multi-market fund. Another 10-12% is done in overseas exchanges, mainly in Asia.
While the Ibovespa fell 2.41% today, the Dow Jones was up 1.51% and the S&P 500 was up 1.61%. Among Latin American peers, Mexico’s S & P / BMV IPC increased 1.77%.
“You got into a more dangerous discussion today and any doubt can change the LRF [Lei de Responsabilidade Fiscal]”Says Oliveira, referring to the creation of the Citizen’s Income program and the discussions in the government to limit the Union’s spending on debt securities to 2% of current net income.
Tax risk, emphasizes the manager of Blueline, also results in a high slope of the interest curve, which affects the valuation of listed companies, since it is the long interest used for the calculation by the discounted cash flow method. . Today, the rate of the interbank deposit contract (DI) for January 2025 jumped from 6.22% to 6.56% and the DI for January 2027 from 7.21% to 7.56%.
Economist Gustavo Bertotti, from Messem Investimentos, says that today’s announcement was a “bucket of cold water” in the market, expecting spending cuts, signs of tax reform that did not come, or new sources of income. “It doesn’t solve the problem. It was just a reorganization, plus the issue of precautions that set a legal precedent. ”
Bertotti recalls that the government of President Jair Bolsonaro started well, with the Social Security reform, for example, but now he is following another path and a speech aimed at popularity.
“It was not what the market expected and it was a solution that Brazil has already adopted several times. It’s complicated, ”he says.
Shares in the banking sector also lost strength, which rose 6% in the morning, as in the case of Santander units, with a report from Bank of America (Bofa) and credit from the Central Bank. Santander units closed the session with a rise of 2.10% and Banco do Brasil rose 0.69%, while Bradesco ON fell 0.92%, Bradesco PN (-0.30%) and Itaú Unibanco (-0.04%).
– Photo: Pixabay
