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SAO PAULO – Ibovespa Futuro opens on Tuesday (2) with investors hopeful that the victory of Arthur Lira (PP-AL) in the elections to the presidency of the Chamber of Deputies and Rodrigo Pacheco (DEM-MG) for the presidency of the Senate to help unlock the liberal agenda of the Ministry of Economy. Both were supported by President Jair Bolsonaro.
Lira was chosen with a big lead in the first round, giving the Plateau some breathing space to play out its priority agenda and still some guarantee in the face of roughly 60 impeachment requests against President Jair Bolsonaro.
Among the indicators, industrial production grew 0.9% in December compared to November and closed 2020 with a fall of 4.5%, revealed the Brazilian Institute of Geography and Statistics (IBGE). The median of the economists’ expectations pointed to an increase of 0.3% in the month.
Outside, stock markets continue to make gains as investors monitor signs of a recovery in the global economy.
At 9:12 am (Brasilia time), the Ibovespa futures contract expiring in February 2021 was up 1.3% to 118,980 points.
The US dollar maturing in March has losses of 0.42%, at R $ 5.412.
In the future interest market, the ID of January 2022 operates stable at 3.33%, the ID of January 2023 falls two basis points to 4.84%, the ID of January 2025 falls three basis points to 6.27% and the January 2025 DI registered a negative variation of four basis points to 6.93%.
The Gross Domestic Product (GDP) of the Eurozone fell 6.8% in 2020, after falling 0.7% in the fourth quarter, as a result of the impact of the second wave of the Covid-19 pandemic. Economists polled by Reuters had expected a 1.0% quarterly contraction after a strong recovery between July and September, when the euro zone eased restrictions on travel and leisure following the first wave of Covid-19 cases.
US futures indices show gains. The focus continues to be on retail stocks, which investors began to turn to in droves, after individual investors organized via the Internet began buying stocks that hedge funds used in shorting operations.
Shares in GameStop, which were the first target of the coordinated action, rose 400% last week. In the second, they fell 30% and continued to fall after the close. The price of silver also rose, after being the focus of discussions on social media last week.
Still on the radar is the $ 1.9 trillion stimulus package. Yesterday, US President Joe Biden and Republican senators met to discuss the issue, in a meeting that was considered productive by both parties. Returning to the corporate radar, the numbers for Amazon and Alphabet will be released after the market closes.
Asian stock markets also rose on Tuesday, following the jump in US stocks. Furthermore, in China, a liquidity injection from the central bank eased concerns about restrictive conditions, while the drop in cases of coronavirus infections also helped confidence.
China’s short-term exchange rates fell to a two-week low as signs of liquidity stress in interbank money markets began to wane. The People’s Bank of China injected 78 billion yuan ($ 12.08 billion) into money markets earlier that day. The persistence of tight liquidity conditions has recently fueled speculation that the central bank could tighten monetary policy and prompted a sharp correction last week.
In addition to market optimism, China reported the fewest new Covid-19 cases in a month.
On the coronavirus, the Japanese government is expected to announce the extension, until March 7, of the state of emergency that covers Tokyo and other regions that have struggled to contain the virus outbreaks.
Elections to Congress
In the elections for the presidencies of the Chambers of Congress that were held on the second (1st) day, Arthur Lira (PP-AL) won as mayor and Rodrigo Pacheco (DEM-MG) as president of the Senate. Both candidates elected in the first round were preferably President Jair Bolsonaro (without party), and will remain in their new positions for two years, until 2023.
Lira received 302 votes, and the runner-up, Baleia Rossi (MDB-SP), received 145. He was supported by the opposition and by the then mayor, Rodrigo Maia (DEM-RJ). The election is important for the Executive because the President of the Chamber has the power to decide the voting guidelines of the plenary session and decide whether or not to open an impeachment process against the President. Pacheco also had the support of the then president of the Senate, Davi Alcolumbre (DEM-AP).
Shortly after being elected, Lira canceled the vote for the remaining positions on the Board of Directors, made up of two vice presidents, four acting secretaries and four alternates, and ordered a new vote to be held on Tuesday.
Lira also canceled the composition of the bloc that supported his opponent, Baleia Rossi, claiming that it was registered after the deadline, with the PT defining its participation after the deadline.
Thus, the parties that supported Rossi’s candidacy are now counted individually in the division of positions on the Board of Directors, which should result in the loss of positions that they would otherwise hold due to their size. Baleia Rossi allies claim to consider the act illegal and intend to appeal to the Federal Supreme Court.
In his speech after taking office, Pacheco highlighted the need to help the population most in need, without breaking the spending ceiling.
“There is a social layer of poverty, of vulnerable, needy people, a result of the pandemic or not, but who need the assistance of the Brazilian State. So now I am committed to a deal with the Executive, with the economic team, to seek possible forms of fiscal responsibility, to observe the spending ceiling, but without ceasing to serve the people who need it most, ”he said.
Estadão also points out that, the day after the congressional elections, the Minister of Economy, Paulo Guedes, must today make a political gesture to the new presidents of the Chamber and the Senate to indicate what is a priority for the government in the Economic Agenda in 2021 Guedes intends to open a dialogue with the leaders and draws up a list of the current proposals of the Congress that, in the evaluation of the economic team, are fundamental for the economic recovery in 2020.
The minister is willing to announce priorities, but awaits the political moment so as not to make mistakes that occurred in the past in the articulation of the economic agenda with Congress. His confidence and that of his team is that the government, with the election, will find its parliamentary base to advance the votes. For that, in his opinion, a lot of talk and coordination of movements will be needed, especially the demand in relation to the renewal of emergency aid. The minister has already said that to grant aid it will be necessary to “go to war” and unleash a disaster protocol.
Radar social programs and incentives
On Monday, the new mayor, Arthur Lira, said in an interview with CNN that he will seek the new president of the Senate, Rodrigo Pacheco, this Tuesday to unblock the creation of a new social program, respecting the spending ceiling. He defends the progress of the emergency proposals and the installation of the CMO (Mixed Budget Commission).
“We have to take emergency measures. This will be our focus in the first days in office. Since last year we have been advocating for the creation of a new social program that is inclusive and with fair value (…) There are many people who are outside a single registry, without emergency assistance, without a budget to do so, and we have to discuss very clearly and quickly so that Brazil begins to unblock and point towards the future ”.
In addition, after the elections, the government is preparing to launch a series of initiatives aimed at boosting the economy, according to information reported by the daily Valor. Among the measures are anticipating the thirteenth salary of retirees, the salary bonus and credit facilitation measures.
On Monday, the attempt by certain sectors of organized truckers to repeat the 2018 strike and pressure the government to set the categories failed. Contrary to what happened in the past, there was no support from the carriers, the mobilization was limited to isolated cuts of federal highways and a small demonstration on the Castello Branco highway in São Paulo. The Federal Police intervened in three demonstrations: in Goiás, Bahia and Rio Grande do Norte.
Among the claims is the minimum freight floor, officially achieved in the 2018 strike, but which has not yet entered into force and there is still no deadline for that. According to the newspaper Valor, there is an excess supply of autonomous services, which puts pressure on the category’s profits, something that worsens when fuel prices rise. The government is discussing the zeroing of the PIS-Cofins in diesel, which would imply losses of R $ 26 billion per year. The measure has the green light from President Bolsonaro.
Corporate radar
The first large bank to publish the results of the fourth quarter of last year, Itaú Unibanco registered a recurring net income of R $ 5,388 billion in the period, 26.1% less than in the last quarter of the previous year. In a year marked by the pandemic, its consolidated result was R $ 18.5 billion, a decrease of 34.6% compared to 2019, impacted by the increase in expenses reserved to cover non-compliance. Another Latin American bank appears, contudo, increase of 7% in profit in the fourth quarter compared to three previous months, as a reflection of the gradual reopening of the economy, which allowed a reduction of two expenses with provisions and expansion of the credit portfolio for Physical person.
He also highlighted, Eneva reported that she was invited by Petrobras to participate in the negotiation phase for a potential acquisition of the Urucu Pole, located in the Solimões Basin, in the State of Amazonas, for exploration and production of hydrocarbons. The previous day, assets rose 13.51% after the information that the company won the dispute with 3R, for the Urucu field.
The Government of Minas Gerais reported yesterday that it does not proceed with the information that the institutions that represent the public power have finalized negotiations with Vale to repair the socioeconomic damage caused by the rupture of the dam, in Brumadinho in January 2019. According to En In a report from the newspaper “O Tempo”, Vale and the government closed the deal at R $ 37 billion, citing a source related to the government and the Minas Gerais Court of Justice (TJMG).
The Assaí cash and carry chain, owned by the GPA group, plans to go public in April and invest about R $ 7 billion in 123 new stores in five years, according to information published by Valor. The company has held talks with investors to address its GPA spin-off plan and pre-listing on B3.
(with Reuters and Agência Estado)
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