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The session is encouraging again for international exchanges after Democrat Joe Biden won the US election with a wide lead, reducing the risk of impeachment, although Donald Trump has not yet relented.
On the political radar, Jair Bolsonaro has yet to comment on the elections in the United States after Biden’s victory, while the news in the newspapers points to political articulations that point to 2022. In the business sector, pay attention to the results of Magazine Luiza and BRF after closing. Check out the highlights:
1. Global grants
European equity markets and American futures markets rose on Monday, following the election of former President Joe Biden as president of the United States on Saturday afternoon (7), ending days of uncertainty about the outcome. . The counts for the states of Pennsylvania and Nevada were decisive.
The S&P 500 Futuro Index rose 1.45%; Nasdaq Future Up 1.82%; the Dow Jones Future is up 1.41%.
News of the presidential race overshadowed alarming data on the coronavirus. On the 4th, the United States was the first country to exceed the mark of 100,000 new cases of contagion by the coronavirus registered (with 107,000). On the 6th, there were 132 thousand cases. On the 8th, another 101 thousand cases were registered, the highest number registered in the country on a Sunday to date.
There is no centralized body in the country in charge of declaring the victory of the candidates, which is traditionally in charge of the press. On Saturday, the Associated Press international news agency and other major outlets, including the US newspaper The New York Times, declared that Biden had obtained the 270 electoral colleges necessary to become president of the United States.
The current president, Donald Trump, did not publicly accept the defeat and promises to question the results in court. But analysts believe there is little chance it can change the outcome.
The market is keeping an eye on the results of the Senate vote in Georgia. So far, Democrats and Republicans are tied for senator counts, each with 48 confirmed. Georgia’s outcome should be decisive as to whether Republicans will maintain dominance over the Senate or whether Democrats will take the lead.
With the resignation of a Republican senator in 2019, there are two senatorial elections in the state, one of which takes advantage of the Democratic candidate, and the other, a Republican candidate. To secure a majority, Democrats would have to win both. Due to Biden’s small margin over Trump, votes in the state will be counted.
The likely compromise between a Democratic presidency and a Republican-led Senate appears to be well received by the market. This arrangement will drastically limit Biden’s ability to carry out deeper economic reforms while maintaining the status quo. In Europe, the indices also rose on Monday.
The Eurostoxx index is up 1.41%; Dax, from Germany, rises 1.98%; the FTSE 100, from the United Kingdom, rises 1.41%; France’s CAC rises 1.62%; and the FTSE MIB, from Italy, rises 2.14%.
In parallel, the alarming news about the coronavirus pandemic on the continent continues to be a cause for concern. Due to the rapid rise in infections, Goldman Sachs economists lowered their estimates of global growth in 2021 by 0.5 percentage points, to 6%. In Europe, France foresees a drop in economic activity, up to 12% below normal, due to the new blockade implemented in the country.
In Asia, the results of the US elections also contributed to a positive trend in equity markets.
Japan’s Nikkei Index closed 2.12% higher; Hong Kong’s Hang Seng Index rose 1.18%; South Korea’s Kospi rose 1.27%; China’s Shanghai index rose 1.86%.
Over the weekend, mixed data on China’s trade balance were released. In the annual comparison for October, Chinese exports rose 11.4%, beating analysts’ forecast, up 9%, while imports rose 4.7% in the period, below the estimate of increase 8.3%.
See below the performance of the main indices at 7:30 am (Brasilia time):
United States
* S&P 500 Futures (US), + 1.45%
* Nasdaq Future (US), + 1.82%
* Dow Jones Futures (US), + 1.41%
Europe
* Dax (Germany), + 1.98%
* FTSE 100 (UK), + 1.41%
* CAC 40 (France), + 1.62%
* FTSE MIB (Italy), + 2.14%
Asia
* Nikkei (Japan), 2.12% (closed)
* Hang Seng Index (Hong Kong) + 1.18% (closed)
* Kospi (South Korea), + 1.27% (closed)
* Shanghai SE (China), + 1.86% (closed)
Raw materials and bitcoin
* WTI oil, + 2.29%, at $ 37.99 a barrel
* Brent oil, + 2.21%, 40.32 dollars a barrel
* Bitcoin, US $ 15,450.51, + 3.28%
About the ore: ** Iron ore futures traded on the Dalian Stock Exchange closed up 3.61%, trading at 817.5 yuan, equivalent to $ 123.66 today (in the last 24 hours).
USD / CNY = 6.61
2. Agenda of indicators
At 8:25 am, the Central Bank released its Focus Bulletin, with economists’ projections on important indicators, such as GDP growth, inflation and the variation of the dollar against the real.
Economists raised their estimate for the Broad Consumer Price Index (IPCA) from 3.02% to 3.20% in 2020, being the thirteenth highest followed in the indicator. For 2021, the projection went from 3.11% to 3.17%. Furthermore, the fall in the estimate of the Gross Domestic Product (GDP) decreased from 4.81% to 4.80%. The estimated expansion was from 3.34% to 3.31% by 2021.
At 3:00 p.m., the Brazilian government publishes the data on the trade balance until November 8.
Still on the radar, the Central Bank said in a statement that it continuously evaluates the operation of the foreign exchange market and stated that it does not anticipate intervention decisions, rejecting any interpretation in this regard. In a virtual event promoted by Itaú on Friday afternoon, the BC director, Fabio Kanczuk, indicated that the BC should act at the end of the year due to the large flow expected in the country due to the issue of bank over-coverage, a protection mechanism against the variation of the exchange rate.
3. Political news
Live over the weekend, President Jair Bolsonaro (non-party) made no mention of Biden’s victory and says he doesn’t know if he will attempt re-election. According to information from the newspaper O Globo, Bolsonaro’s allies defend the administration with a less radical discourse after Trump’s defeat.
Still on the political radar, according to Folha de S. Paulo, Sergio Moro and Luciano Huck are negotiating an electoral alliance to contest the presidency in 2022. The former Minister of Justice and Public Security of Moro and the television presenter met in Curitiba to discuss third way. Who would top the list was not debated, a discussion that should take place throughout 2021; the articulation of the center also includes João Doria, governor of São Paulo.
Also in the spotlight, the Bolsonaro government is looking for ways to establish control over NGOs (Non-Governmental Organizations) in the Amazon, reports the newspaper O Estado de S. Paulo. The move comes at a time when Democrat Joe Biden’s victory as US president raises expectations of increased pressure on escalating deforestation rates in the Amazon.
Biden is historically linked to the environmental cause. In a debate against Trump in late September, he said that, if elected, “he would immediately begin organizing the hemisphere and the world to provide $ 20 billion for the Amazon, so that Brazil no longer burns the Amazon.” He said that the international community would offer the 20 billion dollars for Brazil to stop destroying the forest.
“And if it doesn’t stop, it will face significant economic consequences,” he said.
Estadão says that it obtained access to documents prepared by the National Council for the Legal Amazon, a collegiate created in 1985, during the military dictatorship, which ended in 1995, recreated by the Bolsonaro government and currently chaired by the vice president, General Hamilton Mourão.
According to the São Paulo newspaper, the document was sent by Mourão to the ministers and aims to “guarantee the prevalence of national interests over individuals and politicians.” The objective would be “to obtain 100% control of the NGOs that work in the Amazon Region, by 2022, to authorize only those that serve national interests.” The document foresees “the creation of a regulatory framework for the performance of NGOs.”
The state of Amapá has been operating without electricity in most municipalities since last Tuesday (3), after a transformer was destroyed by a fire. On Saturday (7), the device was replaced.
On Sunday (8), the state released the electricity supply rotation schedule in 13 municipalities affected by the blackout. The full supply should only be established next weekend, says the Ministry of Mines and Energy, not to mention an exact day.
4. Brazil should fall in the ranking of largest economies
With the reduction of GDP (Gross Domestic Product) due to the crisis driven by the pandemic, added to the strong devaluation of the real against the dollar, the Brazilian economy should suffer a sharp fall in 2020. By the end of the year, Brazil should stop appear among the ten largest economies in the world, according to data from the IMF (International Monetary Fund) compiled by FGV (Fundação Getulio Vargas) and broadcast by Valor newspaper.
According to IMF projections, Brazilian GDP is expected to shrink by 5.8% in 2020. When values are converted to dollars, which explains the decline in the value of the real, the fall will be 28.3% in 2020 compared. with 2019.
Thus, the country should drop three positions in the ranking of the world’s largest economies, from ninth to 12, being surpassed by Canada, South Korea and Russia. Brazil has already ranked as the seventh largest economy, when the real was valued.
The Brazilian economy is also suffering from the rebound in the IGP-M inflation index, which has raised the cost of public debt. Between January and September 2020, the expense in collections in the portion of the gross debt linked to the IGP-M doubled compared to the same period of 2019, to R $ 20 billion. The fiscal crisis and low interest rates have made it difficult for the country to attract investment.
5. Corporate radar
Latam, the largest airline in Latin America, reported on Friday (6) a net loss of US $ 573.1 million in the third quarter, affected by the coronavirus pandemic.
The net profit of the food company M. Dias Branco was R $ 265 million in the third quarter, the company reported. It was a jump of 97.3% in the annual comparison.
SLC Agrícola reported a net loss of R $ 35.7 million in the third quarter, a decrease of 63.2% compared to the same period last year.
US renewable energy group Rio Energy is in talks to sell its wind generation assets in Brazil. Petrobras completed the sale of the Baúna field to Karoon, for US $ 150 million.
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