In a day marked by mixed economic signals and internal corporate news, the Ibovespa index closed down slightly by 0.08% at 124,645 points, reflecting its third straight day of losses.
This slight decline was influenced by various factors. These included financial results from Vale, pivotal decisions on Petrobras dividends, and fluctuating GDP figures from the United States.
Collectively, these factors swayed both the Brazilian main stock index and the commercial dollar, with the latter edging up by 0.25% to close at R$ 5.19.
The US GDP figures for the first quarter of 2024 revealed a deceleration, posting a growth of just 1.6%.
This was a significant drop from the 3.4% increase in the previous quarter and below the 2.4% growth anticipated by analysts.
This slower growth, paired with a surprising uptick in the core PCE inflation rate, tempered expectations of an immediate interest rate cut by the Federal Reserve, hinting at more sustained inflationary pressures.
Francisco Nobre of XP highlighted that the persistently high inflation measured by the PCE could delay expected disinflation.
Claudia Rodrigues from C6 Bank noted that despite the reduced output, US consumer spending and investments remained robust.
This robustness was potentially fueled by a shift to imported goods amid a stronger global dollar.
Leonardo Costa of ASA Investments pointed to the unexpected rise in the core PCE as evidence of ongoing inflation challenges. He termed this phase the ‘final mile’ in the battle against inflation.
Major indices in New York mirrored these economic apprehensions by closing lower, affecting investor sentiment globally, including in São Paulo.
Corporate Earnings and Market Movements in Brazil
Domestically, Vale reported a 9% decrease in profits for the first quarter of 2024, falling below market expectations and causing its shares to drop by 2.11%.
Nevertheless, Vale remains optimistic about the coming year, despite the immediate downturn.
On another note, Assaí’s shares fell by 3.34% even though it reported profits above consensus. Meanwhile, Klabin’s shares dipped by 1.40% after announcing a 64% decrease in profits.
In a significant corporate development, Petrobras’ shareholders approved a payout of R$22 billion in dividends.
This propelled its shares up by 2.40%, though it was insufficient to reverse Ibovespa’s downward trend.
With the financial community bracing for the upcoming full release of the March PCE report, further market volatility is anticipated.
In short, this demonstrates the tight interlink between global economic indicators and local market dynamics.