Today’s morning call indicates a quiet day for significant market events, leading investors to focus on recent interest rate decisions by the Monetary Policy Committee (Copom) and the U.S. Federal Reserve (Fed).
Expectations also linger for company earnings reports due today, with financial insights eagerly awaited.
Highlighted among the anticipated reports are those from:
- Sabesp (SBSP3)
- CPFL (CPFL3)
- Cemig (CMIG4)
Sabesp’s report stands out as particularly significant. Prior to its Q4 earnings release, Itaú BBA issued a highly positive report on the company.
Other News
- Reddit’s IPO is set at $34 per share, valuing the company at $6.4 billion.
- The São Paulo municipality advances Sabesp’s privatization with a new proposal to the City Council.
- Fed Chair Powell notes U.S. inflation is slowing yet remains high, with the future path uncertain.
Itaú BBA upgraded Sabesp’s target price to R$120.30/share by the end of 2024 from R$83.60, reinforcing a buy recommendation.
Recap: Fed and Copom Decisions
The Fed’s afternoon decision left U.S. interest rates unchanged between 5.25% and 5.50%, the highest since 2001. This was in line with market expectations.
Copom announced its decision after the market closed, reducing the basic interest rate by 0.50 percentage points from 11.25% to 10.75% per annum.
The stock market closed up 1.25% at 129,124.83 points, while the dollar fell 1.10% to R$4.9744.
U.S. Stock Market Performance
Wall Street’s main indexes hit new all-time highs following the Fed’s interest rate decision and Fed Chair Jerome Powell’s press conference, fueling market expectations of a rate cut in June.
This decision led to a rally in New York stock markets, which opened mixed and gained momentum as risk appetite increased.
This marked the first time all three major indexes closed at record highs on the same day since November 8, 2021.
At the close, the Dow Jones increased by 1.03% to 39,512.13 points, the S&P 500 rose by 0.89% to 5,224.62 points, and the Nasdaq grew by 1.25% to 16,369.41 points.