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Stocks on the rise
Global stock markets rose earlier this week, fueled by increased investor optimism about the recovery of US President Donald Trump. If confirmed, Trump’s recovery reduces the great uncertainty surrounding the presidential race in the United States today, just four weeks before the elections.
In Brazil, the market continues to follow the government’s articulations this week to try to create the Renda Cidadã social program. The most recent idea, according to Folha de S.Paulo, is to extinguish the 20% discount granted to taxpayers who opt for the simplified declaration of Personal Income Tax.
In addition, government officials are making efforts to appease the relationship between Economy Minister Paulo Guedes and the mayor, Rodrigo Maia (DEM-RJ). Tonight they will meet at dinner to try to resume the dialogue. According to the Political Transmission, the meeting will take place in the house of the Minister of the Federal Court of Accounts, Bruno Dantas.
In corporate news, Petrobras announced the sale of a company in Uruguay for US $ 61.7 million. Qualicorp and JHSF disclosed the distribution of interest on equity. CCR reported Friday that traffic on the roads between September 25 and October 1 increased 4.1% year-on-year.
1. Global exchanges
Global stock markets are on the rise with the news of better health from the President of the United States, Donald Trump, who is with Covid-19.
In Europe, the Euro Stoxx index advanced 0.66%. The CAC, in Paris, rose 0.75% and the FTSE MIB, in Italy, registered an increase of 0.59%, while the FTSE 100, in London, gained 0.66%. Germany’s DAX is up 0.63%.
S&P 500 futures were up 0.61%, while Dow Jones futures were up 0.64%. Nasdaq futures were up 0.93%.
Yesterday, Trump posted a video on Twitter saying that he is improving from the disease. In addition, he took a car ride to greet his followers.
However, doctors said he was being treated with dexamethasone, a drug that is generally recommended for severe cases of the disease. The president has also experienced two drops in oxygen levels since the diagnosis was announced Friday.
On Sunday, a Reuters / Ipsos poll showed Joe Biden leading the presidential race, with 51% of voting intentions, while Trump took 41% of voters.
Still highlighted, there are signs of progress in the negotiations of a new fiscal stimulus plan in the country.
In Asia, markets closed higher. In Japan, the Nikkei rose 1.23%, while Hong Kong’s Hang Seng Index rose 1.32% and South Korea’s Kospi rose 1.29%. In China, markets are closed due to a local holiday.
* See the performance of the markets, at 07:09 (Brasilia time):
New York
* S&P 500 Futures (US), + 0.61%
* Nasdaq Futures (US), + 0.93%
* Dow Jones Futures (US), + 0.64%
Europe
* Dax (Germany), + 0.62%
* FTSE 100 (UK), + 0.65%
* CAC 40 (France), + 0.73%
* FTSE MIB (Italy), + 0.58%
Asia
* Nikkei (Japan), + 1.23% (closed)
* Hang Seng Index (Hong Kong), + 1.32% (closed)
* Kospi (South Korea), + 1.29%
Raw materials and bitcoin
* WTI oil, + 4.21%, at $ 38.61 a barrel
* Brent oil, + 3.90%, at $ 40.80 a barrel
* Bitcoin, $ 10,675.92, + 0.69%
2. Agenda
Investors follow the publication of the Central Bank Focus Bulletin. Financial market economists raised their inflation estimate for this year and improved their forecast for a decline in Gross Domestic Product (GDP) in 2020.
For 2020, the forecast for a fall in GDP went from 5.04% to 5.02% in the fourth week followed by improvement and, for 2021, the market continued to project an increase of 3.5%. In addition, it raised the inflation estimate for 2020 from 2.05% to 2.12%.
Subsequently, the Markit Purchasing Managers Index (PMI) for services in Brazil and the United States will be released. At 3 pm, the market follows the Brazilian weekly trade balance.
3. Citizen income
This week, the market continues to monitor the government’s articulations to try to create the Renta Ciudadana social program. The most recent idea, according to Folha de S.Paulo, is to extinguish the 20% discount granted to taxpayers who opt for the simplified declaration of Personal Income Tax. According to the newspaper, the measure can reach more than 17 million Brazilians.
Despite including the simplified form, which has existed for 45 years, this plan would retain the right to medical and educational deductions. Even so, it would be necessary to leave space in the spending ceiling. Therefore, the Ministry of Economy must fine-tune the Budget to find funds that can be cut.
In addition to the Citizen Income, there are other issues under discussion by the government. According to Valor Econômico, they began to discuss the possibility of extending other actions created to face the pandemic, such as the National Program to Support Micro and Small Enterprises (Pronampe) and the reduction to zero of the Tax Rate on Financial Operations. (IOF) in credit operations. However, there is no money to support them.
The situation creates an impasse. On the one hand, the economic team intends to restrict all emergency programs until 2020. Therefore, this would be an exceptional year in the fiscal adjustment strategy. On the other hand, the pandemic may impose the continuity of some of these programs, according to members of the economic team heard by Valor.
The health situation of the President of the United States continues to be monitored by investors around the world, and it is likely that he will be written off today. On Sunday, White House physician Sean Conley said he “keeps getting better.” Before that, the mismatched information and confirmation that Trump had two episodes of a drop in oxygen levels were the center of attention. Yesterday, the American president even left the hospital for a car ride in which he greeted his followers.
4. Guedes relations
Government members are making efforts to calm the relationship between the Minister of Economy, Paulo Guedes, and the mayor, Rodrigo Maia (DEM-RJ). Tonight they will meet at dinner to try to resume the dialogue. According to the Political Transmission, the meeting will take place in the house of the Minister of the Federal Court of Accounts, Bruno Dantas. Guedes and Maia were expected to meet this Sunday, but the conversation was postponed.
The conversation aims to unlock the legislative agenda of the economy. Last week, they changed the tines again. Guedes accused Maia of joining the left to prevent privatizations, and the deputy called the minister unbalanced.
Another relationship that Guedes is following on the market radar is with Regional Development Minister Rogério Marinho. The war declared between them on the form of financing of the Citizen Rent program showed a division in the government. Last week, Marinho publicly defended that the show should go out “anyway.”
In response, Guedes again called Marinho a traitor and gave an alert to the government’s political wing. “If the disease comes (in a second wave), we will break the roof. But we are not going to drill the ceiling to do politics, “he warned. “I can’t believe Marinho spoke ill of me. If he spoke badly, it shows that, in the first place, he is not prepared, in addition to being unfair and breaking a ceiling, ”he said, according to a report by Estadão.
Following the fight between Marinho and Guedes, President Jair Bolsonaro said this weekend that he intends to reprimand Marinho in an attempt to end the dispute between the two once and for all, according to Folha de S.Paulo. The president’s conversation with the minister is expected to take place earlier this week, when Bolsonaro is expected to hold a ministerial meeting.
5. Corporate radar
In corporate news, Petrobras announced the sale of a company in Uruguay for US $ 61.7 million. Qualicorp and JHSF disclosed the distribution of interest on equity. CCR reported Friday that traffic on the roads between September 25 and October 1 increased 4.1% year-on-year. In the accumulated result of the year, there was a decrease of 4.6%.
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