Brazil’s Financial Morning Call for November 21, 2024
As trading commences on Thursday, November 21, 2024, investors in Brazil are gearing up for a day filled with key economic indicators and strategic announcements that could influence both domestic and international markets.
Today’s agenda includes the CMN Meeting at 9:00 AM and Japan’s Services Sector PMI at 9:30 PM. Additionally, Brazil’s currency performance remains under scrutiny amidst global economic shifts.
The CMN (Conselho Monetário Nacional) Meeting will be a focal point for investors, as it may provide insights into monetary policy decisions and economic strategies. This meeting could potentially impact interest rates and economic growth projections for Brazil.
Japan’s Services Sector PMI, while not directly related to Brazil, could offer valuable information about global economic trends, particularly in the Asian markets, which may indirectly affect Brazilian trade and investments.
Economic Calendar for Thursday, November 21
Brazil
- 9:00 AM – CMN Meeting
Japan
- 9:30 PM – Services Sector PMI
Brazil’s Market Performance Yesterday
Brazilian markets were closed on Wednesday, November 20th, for Black Awareness Day. However, international markets saw significant movements. The Brazilian Real (BRL) has hit R$5.78, struggling to keep pace with the strengthening U.S. dollar.
U.S. Markets Yesterday
U.S. stocks drifted to a mixed finish, though the modest moves for indexes masked some thrashing underneath the surface. The S&P 500 ended barely changed Wednesday after trading lower for much of the day.
The Nasdaq composite slipped 0.1%, and the Dow Jones Industrial Average eked out a gain of 0.3%. Target led the market lower and lost more than a fifth of its value after the retailer gave a dour forecast for the holiday shopping season.
Market Indices on Wednesday:
- S&P 500 rose 0.13 points, or less than 0.1%, to 5,917.11
- Dow Jones Industrial Average rose 139.53 points, or 0.3%, to 43,408.47
- Nasdaq composite fell 21.32 points, or 0.1%, to 18,966.14
- Russell 2000 index of smaller companies rose 0.71 points, or less than 0.1%, to 2,325.53
Commodity Markets
Oil Prices Slide
On November 20, 2024, West Texas Intermediate (WTI) crude oil traded at $68.95 per barrel, down 0.63%, while Brent crude oil was priced at $73.12 per barrel, down 0.26%. The International Energy Agency (IEA) forecasts that global oil supply may surpass demand by over 1 million barrels per day by 2025 if current production levels persist.
Gold Futures Closed Higher
Gold futures closed higher for the third consecutive session on November 20, reflecting growing investor concerns over geopolitical risks. The December gold contract rose by 0.78%, reaching $2,651.70 per troy ounce on the Comex. This increase highlights a shift in investor sentiment, as many seek safe-haven assets during uncertain times.
Bitcoin Reached an Unprecedented High
Bitcoin reached an unprecedented high of $97,092.48 on November 21, 2024, representing a 2.90% increase in just 24 hours. The crypto market buzzed with activity as trading volumes soared to $78.8 billion. Several factors contributed to this impressive rally, including the recent U.S. presidential election and institutional investment.
Corporate Highlights
XP Inc. Achieves Record Profits in Q3 2024
XP Inc., Brazil’s leading investment platform, reported exceptional financial results for the third quarter of 2024. The company’s net profit reached R$1.187 billion ($208.2 million), marking a 9% increase from the previous year.
XP’s client base expanded to 4.659 million active users, a 6% rise from the previous year, while assets under custody grew by 12%, reaching R$1.213 trillion ($212.8 billion).
Nubank Considers Legal Domicile Change to UK
Nubank, a leading Brazilian fintech company, is contemplating moving its legal domicile to the United Kingdom. This potential shift aligns with the UK government’s goal of attracting technology firms and investments.
By late 2024, Nubank had over 100 million customers across Brazil, Mexico, and Colombia, making it one of the largest digital banks globally and the most valuable bank in Latin America.
BRF’s Strategic Move: Expanding Footprint in China
BRF, a major player in the global food industry, has made a significant stride in its international expansion strategy. The company recently acquired a food processing plant in China’s Henan province for $43 million.
Smart Fit’s Strategic Moves Reshape Fitness Landscape
Smart Fit approved a share repurchase program and completed the acquisition of Velocity Group. The company can repurchase up to 16,130,245 shares, representing 5% of outstanding shares. The acquisition of Velocity Group, which operates 82 locations specializing in spinning fitness studios, strengthens Smart Fit’s position in the specialized fitness market.
Outlook
Markets are expected to remain cautious as investors digest the outcomes of the CMN Meeting and monitor global economic indicators. The positive performance of companies like XP Inc. suggests robust growth in certain sectors of the Brazilian economy. However, uncertainty remains due to global economic conditions and potential shifts in monetary policy.
Key factors to watch today include:
- CMN Meeting Outcomes: The meeting’s decisions could impact monetary policy and economic growth projections.
- Currency Stability: The BRL’s performance against the dollar will continue to be a focal point, influencing import costs and inflation.
- Global Economic Indicators: Japan’s Services Sector PMI may provide insights into international economic health.
- Commodity Prices: Oil and gold price movements could affect Brazil’s export revenues and investment strategies.
- Cryptocurrency Trends: Bitcoin’s recent surge may influence investor sentiment in alternative assets.
Note: All times are in Brasília Time (BRT)
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-1.52%
174,041.95
-1.52%
66,247.47
-1.56%
10,950.74
+0.31%
3,283,854
-1.07%
2,274.53
-0.38%
58,287.01
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| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 174,041.95 | -1.52% | +30.07% | 176,723.62 | 176,720 | 174,042 | — |
| USD/BRL | 5.08 | -0.18% | -8.00% | 5.08 | 5.09 | 5.05 | — |
| EUR/BRL | 5.78 | +0.08% | -10.91% | 5.78 | 5.80 | 5.75 | — |
| SELIC | 14.25% | — | — | — | — | — | |
| BRENT | 98.38 | -2.29% | +42.21% | 100.69 | 101.16 | 95.14 | 29,916 |
| WTI | 90.47 | -1.87% | +37.01% | 92.19 | 92.83 | 87.68 | 336,373 |
| IRON ORE | 161.91 | — | +64.24% | 161.91 | 161.91 | 1 | |
| GOLD | 4,056 | +0.22% | +20.31% | 4,047 | 4,085 | 4,024 | 112,402 |
| SILVER | 58.49 | +1.20% | +49.89% | 57.80 | 59.29 | 57.36 | 26,053 |
| LITHIUM | 67.81 | -1.75% | +51.94% | 69.02 | 68.69 | 67.73 | 177,410 |
| SOY | 1,253 | +1.21% | +24.72% | 1,238 | 1,257 | 1,238 | 166,916 |
| CORN | 487.25 | +5.01% | +21.28% | 464.00 | 492.00 | 479.25 | 257,469 |
| WHEAT | 679.00 | -2.48% | +25.39% | 696.25 | 711.25 | 659.50 | 117,726 |
| COFFEE | 314.20 | +1.55% | +3.07% | 309.40 | 318.55 | 306.40 | 14,168 |
| SUGAR | 14.76 | +0.48% | -10.92% | 14.69 | 14.79 | 14.54 | 45,966 |
| ORANGE JUICE | 142.65 | -2.83% | -57.91% | 146.80 | 146.15 | 141.50 | 345 |
| COTTON | 80.00 | +0.20% | +18.80% | 79.84 | 81.75 | 79.75 | 11,312 |
| BEEF | 222.58 | -1.25% | -1.43% | 225.40 | 224.13 | 220.78 | 19,283 |
| CATTLE | 342.05 | -0.50% | +4.00% | 343.77 | 345.48 | 337.25 | 9,940 |
| COCOA | 5,331 | +0.57% | -34.38% | 5,301 | 5,438 | 5,227 | 17,604 |
| PETR4 | 42.21 | -1.72% | +32.15% | 42.95 | 42.91 | 42.15 | 29,107,700 |
| VALE3 | 75.24 | -0.58% | +33.10% | 75.68 | 75.53 | 74.84 | 8,619,900 |
| SUZB3 | 41.84 | -1.39% | -18.76% | 42.43 | 42.25 | 41.63 | 3,638,900 |
| KLABIN | 17.52 | -0.79% | -5.27% | 17.66 | 17.59 | 17.32 | 3,680,600 |
| SLCE3 | 13.64 | -0.94% | -14.51% | 13.77 | 13.80 | 13.63 | 1,432,400 |
| ABEV3 | 15.64 | -1.76% | +15.85% | 15.92 | 15.90 | 15.61 | 15,218,500 |
| ITUB4 | 42.10 | -1.08% | +23.68% | 42.56 | 42.45 | 42.04 | 10,426,800 |
| BBDC4 | 18.48 | -1.28% | +17.86% | 18.72 | 18.64 | 18.42 | 13,960,400 |
| BBAS3 | 20.35 | -2.77% | +1.40% | 20.93 | 20.82 | 20.35 | 14,376,600 |
| B3SA3 | 15.44 | -1.34% | +17.68% | 15.65 | 15.67 | 15.43 | 35,146,600 |
| WEGE3 | 45.99 | +0.70% | +26.94% | 45.67 | 46.19 | 44.94 | 7,718,600 |
| PRIO3 | 58.82 | -2.84% | +39.05% | 60.54 | 60.27 | 58.46 | 5,375,200 |
| RENT3 | 36.89 | -0.67% | +2.56% | 37.14 | 37.38 | 36.59 | 4,733,700 |
| AZZA3 | 16.65 | -2.35% | -54.40% | 17.05 | 17.17 | 16.65 | 1,511,900 |
| CSNA3 | 5.36 | +1.13% | -37.31% | 5.30 | 5.45 | 5.24 | 8,132,600 |
| GGBR4 | 24.26 | +0.83% | +40.39% | 24.06 | 24.45 | 23.82 | 5,543,500 |
| ENEV3 | 24.90 | -3.11% | +79.65% | 25.70 | 25.58 | 24.87 | 4,494,600 |
| LREN3 | 13.27 | -0.75% | -22.31% | 13.37 | 13.49 | 13.18 | 7,803,700 |
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