2023-10-27 22:40:42
By Paula Arend Laier
SÃO PAULO (Reuters) – The Ibovespa closed lower this Friday, marked by a battery of corporate news and mixed performance on Wall Street, renewing lows of the afternoon session after statements by President Luiz Inácio Lula da Silva that the fiscal target zero of 2024 will hardly be achieved.
The performance was not worse due to the jump in Vale’s shares.
The Brazilian stock market reference index, Ibovespa fell 1.29%, to 113,301.35 points. At the day’s high, it reached 115,341.65 points. At the minimum, at 112,953.38 points. The financial volume this Friday totaled 23 billion.
During the week, Ibovespa still secured an increase of 0.13%, but continues towards a negative result for the month, with a decline of 2.8% accumulated so far.
In an interview with journalists at Palácio do Planalto, Lula stated that the 2024 fiscal target does not need to be zero and that the objective will hardly be achieved, as he does not intend to cut investments to achieve it, highlighting that the market often demands compliance with something you know won’t happen.
“We will hardly reach target zero, especially because I don’t want to make cuts in construction investments,” he stated.
According to the superintendent of Necton/BTG Pactual, Marco Tulli, the president’s statements had a negative impact on the market, as they add discomfort at a time when the government has found it difficult to approve measures in Congress to increase revenue.
“Even if there are expectations in the market that zero deficit will not be reached in 2024, it does not help the president himself to say so,” he added.
The chief economist specializing in fiscal policy at Warren Rena, Felipe Salto, who is in the group of those who do not believe that the zero fiscal target will be achieved next year, stated that Lula’s statements do not change his fiscal scenario, according to a note sent to customers.
“Today’s speech is nothing new to anyone. It just reinforces the speech about preserving public investments, in line with the guidelines of the current government”, he stated, evaluating that it does not mean that the Ministry of Finance has thrown in the towel in relation to the framework. Supervisor.
“Our scenario is one of compliance with the framework, with a zero fiscal target not being observed in 2024, but both triggers being activated in due time,” he added.
Even so, the future interest curve reacted with an increase in DI contract rates, which mainly put pressure on shares of consumer companies and construction companies. The consumer sector index on B3 closed down 3.22%, while that of the real estate sector fell 2.54%.
On Wall Street, the S&P 500 closed down 0.48%, while the Nasdaq rose 0.38%, amid corporate results and inflation data closely monitored by the Federal Reserve showing the lowest increase in 12 months in more than two years, but still at a high level.
In the debt market, however, the yield on the 10-year US Treasury bond was 4.8367% in the late afternoon, up from 4.845% the day before, far from the day’s high, when it reached 4.892%.
Next week, attention will turn to the Fed, which announces its decision on Wednesday. Despite the expectation that the interest rate will remain in the range of 5.25% to 5.5% per year, there are still doubts about the following movements, given the resilience of the North American economy.
HIGHLIGHTS
– VALE ON advanced 3.48%, to 67.57 reais, among the few highs of the day, avoiding a greater loss of the Ibovespa given the strong participation it holds in the index. The night before, the company reported net profit of $2.84 billion for the third quarter, down 36% year on year, but above analyst forecasts.
Adjusted EBITDA from continued operations totaled 4.18 billion dollars. When commenting on the result this Friday, Vale reiterated an optimistic view on the demand of its main market for iron ore, China, while considering that the mining company’s decarbonization strategy brings important potential to expand its geographic base of customers and also reduce costs.
Also on Thursday, with trading still open, the mining company announced dividends to shareholders of around 10 billion reais and a new share buyback program. Still on the radar, the most traded iron ore futures contract on the Dalian stock exchange, in China, ended daytime trading this Friday with an increase of 2.1%.
– USIMINAS PNA appreciated 4.18%, to 6.23 reais, even after a net loss of 166 million reais in the third quarter, when it also marked the first negative Ebitda since 2015, with a negative result of 20 million reais, with falling revenue and falling steel sales. Analysts, on average, expected a net loss of 180 million and negative Ebitda of around 64 million, according to LSEG data.
The Itaú BBA team drew attention to cash flow in the period as a positive factor in the balance sheet. Steel company executives said in a conference call with analysts that they expect market conditions to still be unfavorable for the recovery of their performance in the fourth quarter.
But they demonstrated a more positive vision for 2024, citing the expectation of reactivation in the coming days of blast furnace 3, at the company’s plant in Ipatinga (MG), which has been shut down since April for a renovation that consumed 2.7 billion reais. In the sector, CSN ON advanced 0.71% and GERDAU PN rose 0.14%.
– HYPERA ON fell 8.25%, to 31.37 reais, with financial agents reflecting the pharmaceutical company’s results in the third quarter, when it recorded net profit from continued operations of 499.5 million reais, an increase of 6.3% year on year a year.
The company’s net revenue was 2.14 billion reais, growth of 5%. For 2023, the company said it estimates an 8% expansion in net revenue in 2023 and thus reach approximately 95% of net revenue, EBITDA and net profit from continued operations expected for the year, remaining in line with the financial projections released in February .
– B3 ON fell 4.52%, to 11.20 reais, correcting much of the increase accumulated in the week, which until the day before exceeded 5%. Last Friday, the market infrastructure company’s shares touched an intraday low since April. Data made available by B3 have shown a drop in the daily volume traded in the equity segment. After surpassing an average of 29.6 billion reais in July, October recorded 22.7 billion reais. In the entire month of September, it reached 22.4 billion reais, after recording 24.7 billion in August and 24 billion in July.
– PETROBRAS PN fell 0.73%, to 35.44 reais, reversing the increase in the first trades, on a day marked by the repercussion of the company’s operational data for the third quarter known after the stock exchange closed the day before, with an increase of 9.6 % in oil production in Brazil.
Petrobras also said on Thursday that a chamber that is part of the Administrative Council for Tax Appeals (Carf) accepted an appeal from the National Treasury, making administratively definitive a tax debt of 762 million reais from the state-owned company. Abroad, oil prices had a positive session, with a barrel of Brent closing up 2.9%.
– ITAÚ UNIBANCO PN dropped 1.48%, to 27.30 reais, BRADESCO PN fell 1.03%, to 14.35 reais, pressured by the worsening sentiment in Brazilian trading.
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