As April approaches its conclusion with just one trading day left, there’s optimism for a positive monthly finish.
Today, the Ibovespa index climbed by 0.65%, reaching 127,351 points, an increase of 825 points.
Despite this, it remains down by 0.59% for the month. Tuesday’s developments, including a holiday eve and the start of the Fed’s two-day meeting, will impact the interest rate decision due on May 1st.
Market optimism surged last Friday as investors increased their risk exposure. Attention is now on the potential impact of U.S. interest rate adjustments globally and locally.
A crucial issue is whether Brazil’s Central Bank will implement a 50 basis point cut at the next COPOM meeting on May 7-8 or settle for a more conservative 25-point reduction.
The unexpectedly low rise in last Friday’s IPCA-15 index suggests that a larger cut may be possible.
Market uncertainties continue as new U.S. economic data is released, influencing speculation.
“No one knows for sure, and forecasts are constantly adjusting,” remarks Werner Roger, CIO at Trígono Capital.
In the U.S., investors were initially buoyed by a 14% surge in Tesla shares following regulatory advancements for autonomous vehicles in China. However, major indexes later wavered and ended near stability.
Casas Bahia (BHIA3) significantly outperformed other stocks, soaring 34.19% after announcing plans for extrajudicial recovery.
This comes amid $4.1 billion ($795.15 million) in debt, supported by its main creditors, Bradesco and Banco do Brasil.
According to Gustavo Senday, a retail analyst at XP, the recovery plan will provide short-term financial relief, facilitating operational adjustments like store closures and inventory reduction.
Other market highlights included Hypera (HYPE3), which was up 5.36% after exceeding first-quarter expectations.
Rede D’Or (RDOR3) rose 2.36% due to favorable analyst reviews that cited robust profit dynamics and solid governance.
Ongoing Tax Reform Discussions in Brazil
In the political realm, tax reform and fiscal issues remain central, with intense discussions ongoing in Brazil.
Bernard Appy, the special secretary for tax reform, indicated that the proposed tax changes on consumption could lower the average tax rate by eliminating benefits worth about 2% of GDP.
However, challenges persist as Senator Daniella Ribeiro plans to adjust the Perse program for inflation.
This could potentially increase the fiscal impact of these tax incentives, a concern for Finance Minister Fernando Haddad.
This development coincides with the government reporting a worse-than-expected primary deficit of R$1.5 billion ($291.26 million) for March.
As April’s final chapter unfolds tomorrow, the market watches closely for any last-minute surprises.