Friday’s Morning Call: Brazilian Market Insights Before Opening
Today, our focus is on Brazil’s release of service sector data for May, as reported by the Brazilian stats agency (IBGE).
This data is vital for assessing economic trends and guiding investment decisions.
Yesterday’s Market Review
São Paulo Stock Exchange:
The São Paulo stock exchange marked its ninth consecutive rise, reaching levels last seen in February 2018.
Boosted by lower-than-expected U.S. inflation and positive local indicators, the Ibovespa index rose 0.85%, closing at 128,294 points, with highs and lows of 128,326 and 127,221 points respectively.
Trading volumes reached R$13.74 billion on the Ibovespa, with a total of R$19.68 billion across B3 by the close of trading at 5:15 PM.
Wall Street Recap:
Wall Street saw a day of profit-taking after reaching successive record highs.
The S&P 500 dropped by 0.88% to 5,584.54 points, influenced by a sell-off in technology stocks, while the Dow Jones edged up by 0.08% to 39,753.75 points.
Major tech firms like Tesla, Nvidia, and Meta experienced losses of over 2%.
Currency and Commodity Movements
The U.S. dollar appreciated by 0.55%, closing at R$5.44 against the Brazilian Real.
U.S. CPI data suggested a marginal increase of 0.1% month-over-month, aligning with market expectations and influencing global currency trends.
Gold prices soared by 1.77% to $2,421.90 per ounce, and oil prices also climbed, with Brent crude reaching $85.40 a barrel due to speculation about U.S. interest rate cuts.
Brazilian Corporate Highlights
- Bradesco BBI’s Retail Analysis: Bradesco BBI now recommends Carrefour Brasil (CRFB3) over Assaí (ASAI3), citing better resilience to rising interest rates and food inflation.
- Morgan Stanley on Vivo: Morgan Stanley upgraded Telefônica Brasil (VIVT3), or Vivo, to “overweight” with a target price of $11, citing improved cash flow and a strong business model for Brazil’s economy.
Investment Trends
- Eletrobras Post-Privatization: Two years after its privatization, Eletrobras (ELET3) is seen positively by analysts, with streamlined operations and improved efficiency. XP sets a target price of R$57.00, indicating potential growth.
- General Motors Investment: GM commits R$1.2 billion to its Gravataí complex, part of a broader R$7 billion strategy, aiming to start production of a new Chevrolet model by 2026.
Sectoral Developments
- Azul and Gol’s Joint Venture: Azul (AZUL4) and Gol (GOLL4) began 40 new joint routes across Brazil, enhancing their network integration.
- Oncoclinicas’ Capital Boost: Oncoclinicas (ONCO3) approved a capital increase of R$1.5 billion to expand its healthcare services.
Global and Local Economic Indicators
- U.S. Inflation Trends: The latest U.S. CPI data showed a slight deceleration, affecting global markets and investment strategies. This could hint at more accommodative monetary policies by the Federal Reserve in the near term.
U.K. Industrial Production:
In May 2023, U.K. industrial production rose by 0.2%, with manufacturing up 0.4%, particularly in high-tech sectors.
Japanese Market Dynamics:
Japan’s stock market has been identified as a new safe haven, attracting considerable foreign investments.
The Nikkei Stock Average reached new highs, buoyed by global market uplifts and favorable economic forecasts from the U.S.
This briefing provides a comprehensive overview of key market trends and data for today’s trading environment.
Live Market IntelligenceBrazil Morning Call — Live Board
Rio Times · Live Market Intelligence
Brazil Morning Call — Live Board
-0.59%
176,501.85
-0.59%
67,298.78
+0.88%
10,959.17
-0.45%
3,356,435
-0.69%
2,313.99
+0.74%
57,575.02
—
| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 176,501.85 | -0.59% | +30.43% | 177,547.57 | 177,896 | 176,293 | — |
| USD/BRL | 5.08 | +0.54% | -8.67% | 5.05 | 5.09 | 5.04 | — |
| EUR/BRL | 5.78 | -0.25% | -11.35% | 5.80 | 5.79 | 5.76 | — |
| SELIC | 14.25% | — | — | — | — | — | |
| BRENT | 100.75 | +7.10% | +47.06% | 94.07 | 87.22 | 85.01 | 38,734 |
| WTI | 92.43 | +6.45% | +41.66% | 86.83 | 92.82 | 87.32 | 289,900 |
| IRON ORE | 161.91 | — | +64.76% | 161.91 | 161.91 | 1 | |
| GOLD | 4,052 | -2.29% | +19.38% | 4,147 | 4,144 | 4,043 | 132,273 |
| SILVER | 57.92 | -3.51% | +47.45% | 60.02 | 60.36 | 57.32 | 29,435 |
| LITHIUM | 69.15 | +0.22% | +59.08% | 69.00 | 69.68 | 68.65 | 89,756 |
| SOY | 1,245 | +0.99% | +23.81% | 1,233 | 1,249 | 1,236 | 107,875 |
| CORN | 487.75 | +5.57% | +22.40% | 462.00 | 489.50 | 483.00 | 157,346 |
| WHEAT | 700.00 | -0.81% | +29.51% | 705.75 | 710.25 | 693.00 | 59,088 |
| COFFEE | 309.70 | -2.19% | +2.77% | 316.65 | 321.30 | 308.25 | 11,393 |
| SUGAR | 14.69 | -0.34% | -9.54% | 14.74 | 14.90 | 14.65 | 37,409 |
| ORANGE JUICE | 145.80 | -2.99% | -56.68% | 150.30 | 148.80 | 144.10 | 248 |
| COTTON | 81.53 | +2.08% | +22.38% | 79.87 | 81.75 | 79.75 | 15,710 |
| BEEF | 220.93 | -1.02% | -2.69% | 223.20 | 221.90 | 217.38 | 14,823 |
| CATTLE | 339.85 | -0.39% | +2.51% | 341.17 | 340.50 | 333.00 | 7,610 |
| COCOA | 5,325 | -0.06% | -36.91% | 5,328 | 5,411 | 5,165 | 12,666 |
| PETR4 | 43.16 | +1.36% | +34.98% | 42.58 | 43.49 | 43.10 | 13,690,900 |
| VALE3 | 76.16 | +1.41% | +32.51% | 75.10 | 77.07 | 74.51 | 9,239,900 |
| SUZB3 | 42.04 | -1.45% | -18.71% | 42.66 | 42.82 | 42.04 | 1,070,800 |
| KLABIN | 17.60 | -1.84% | -4.94% | 17.93 | 17.92 | 17.58 | 1,583,400 |
| SLCE3 | 13.87 | -0.64% | -13.50% | 13.96 | 14.06 | 13.82 | 1,338,900 |
| ABEV3 | 15.90 | -1.43% | +17.07% | 16.13 | 16.11 | 15.88 | 8,114,500 |
| ITUB4 | 42.35 | -1.28% | +23.23% | 42.90 | 42.87 | 42.31 | 14,271,000 |
| BBDC4 | 18.76 | -1.11% | +18.20% | 18.97 | 18.99 | 18.68 | 9,622,500 |
| BBAS3 | 20.83 | -1.23% | +3.02% | 21.09 | 21.08 | 20.78 | 12,941,400 |
| B3SA3 | 15.59 | -1.95% | +16.50% | 15.90 | 15.82 | 15.58 | 19,166,300 |
| WEGE3 | 45.04 | -3.64% | +18.50% | 46.74 | 46.86 | 44.68 | 8,802,400 |
| PRIO3 | 61.16 | +2.33% | +44.05% | 59.77 | 61.35 | 60.56 | 3,574,400 |
| RENT3 | 36.99 | -0.40% | +2.10% | 37.14 | 37.19 | 36.03 | 9,853,400 |
| AZZA3 | 17.55 | -1.46% | -52.75% | 17.81 | 17.71 | 17.23 | 1,161,800 |
| CSNA3 | 5.39 | +0.19% | -38.54% | 5.38 | 5.61 | 5.32 | 7,051,700 |
| GGBR4 | 24.17 | +0.46% | +40.36% | 24.06 | 24.41 | 23.83 | 4,332,500 |
| ENEV3 | 25.56 | -1.58% | +82.70% | 25.97 | 25.80 | 25.45 | 1,550,200 |
| LREN3 | 13.30 | -1.77% | -24.56% | 13.54 | 13.48 | 13.28 | 3,286,600 |
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