This Monday, the Ibovespa index witnessed a 0.31% decline, closing at 127,750.92 points, dropping nearly 400 points. The index, initially optimistic, stumbled due to ongoing market uncertainties in São Paulo.
During XP’s morning call, investor concerns were voiced by Fernando Ferreira. The anticipation of worsening fiscal outcomes post-government fiscal revisions in April has heightened. The recent Copom split has increased risk premiums on the DI curve, and Rio Grande do Sul’s economic struggles are now in the spotlight.
Despite these challenges, the commercial dollar saw a minor increase, settling at R$5.10. Jacqueline Kist from Matriz Capital highlighted U.S. optimism impacting Brazilian markets positively, with expectations from Nvidia’s earnings.
On Wall Street, mixed closures were observed, with the Nasdaq reaching an intraday high and the S&P 500 flirting with a new record. Sam Stovall of CFRA Research suggested a potential AI-driven boom, focusing on companies like Nvidia.
Brazil’s Regional Crisis and Market Movements
The market experienced varied movements, with Vale witnessing a slight dip, while Petrobras rebounded after a challenging period. Other entities such as 3R Petroleum and Enauta suffered losses. Banco do Brasil, however, rose by 0.83%.
Strategists at Santander predict a downward trend for Ibovespa, adjusting forecasts for 2024 to 145,000 points. Focus Bulletin also highlighted rising inflation and Selic rate projections along with dropping GDP estimates.
Leonardo Costa from Asa Investments anticipates a pause in rate cuts, projecting the Selic at 10.50% for 2024, amidst rising inflation expectations challenging the Central Bank’s goals.