Tuesday’s Morning Call: Brazilian Market Insights Before Opening
Today, despite the São Paulo holiday, significant economic activities and events are expected in the country’s financial markets, including the B3 stock exchange.
Jerome Powell, the Chairman of the U.S. Federal Reserve, will testify before Congress, and China will announce its June inflation rate this evening. The stock market will remain open.
Monday’s Market Recap
The Ibovespa index increased for the sixth consecutive session, boosted by a 2.45% rise in Petrobras shares after the company announced fuel price adjustments, which alleviated fears of government interference.
However, metal exporters suffered due to falling iron ore prices. The index closed at 126,548 points, up 0.22%, with a trading volume of R$14.59 billion on the Ibovespa and R$19.16 billion on B3.
The dollar rose to R$5.476 after three sessions of decline. Investors are anticipating inflation data from Brazil and the U.S. to gauge future monetary policy.
The commercial dollar increased by 0.25%, while the futures contract for August rose by 0.22%.
Key Highlights
Fiscal Adjustments in Brazil
Adjusting spending floors for healthcare and education will not resolve Brazil’s fiscal issues.
The National Treasury highlighted that growing mandatory expenses strain the fiscal framework, with potential significant shortfalls starting in 2029.
Petrobras Fuel Price Hike
Petrobras (PETR4) announced a R$0.20 per liter increase in gasoline prices, impacting its stock price immediately.
Detailed analyses estimated the potential rise in Brazil’s inflation rate due to this hike.
Lula’s Focus on Mercosur
President Luiz Inácio Lula da Silva emphasized modernizing Mercosur, suggesting greater integration in the automotive and sugar sectors.
Corporate Updates
Zamp’s Capital Increase Plan
Zamp, the operator of Burger King and Popeyes in Brazil, saw an 8.44% drop in its stock to R$3.58 after announcing a capital increase plan.
The company aims to issue new shares at a 12.5% discount to attract investment, potentially raising up to R$450 million.
Oil Market Fluctuations
Oil futures fell on Monday amid geopolitical concerns and Hurricane Beryl’s impact.
WTI crude for August dropped 1.00% to $82.33 per barrel, and Brent crude decreased by 0.91% to $85.75 per barrel.
The market reacted to a stronger U.S. dollar and optimism about ceasefire talks in the Middle East.
Stock Ratings and Market Predictions
Itaú BBA’s Bank Ratings
Itaú BBA upgraded Santander Brasil (SANB11) and Banrisul (BRSR6) to buy, with Santander Brasil becoming BBA’s top pick among large Brazilian banks. The target price is set at R$33 per share.
For more information read here.
Bank of America on WEG
Bank of America upgraded WEG (WEGE3) to ‘buy’ from ‘neutral’ and raised the target price to R$52 from R$44, citing margin improvements and favorable sector trends.
Embraer’s Growth Potential
Embraer (EMBR3) shares dropped 0.91% in July but have risen 60% year-to-date.
Bradesco BBI raised its price target for Embraer to R$52, indicating a 45% upside, reflecting the company’s strong performance and future potential.
Regional Energy Transition
Brazil and Chile are leading the energy transition in Latin America, ranking 12th and 20th respectively in the World Economic Forum’s Energy Transition Index.
The region shows strong renewable energy potential despite political and economic challenges.
Live Market IntelligenceBrazil Morning Call — Live Board
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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
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| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 176,501.85 | -0.59% | +30.51% | 177,547.57 | 177,896 | 176,293 | — |
| USD/BRL | 5.08 | +0.58% | -8.63% | 5.05 | 5.09 | 5.04 | — |
| EUR/BRL | 5.78 | -0.25% | -11.35% | 5.80 | 5.79 | 5.76 | — |
| SELIC | 14.25% | — | — | — | — | — | |
| BRENT | 100.21 | +6.53% | +46.27% | 94.07 | 87.22 | 85.01 | 38,139 |
| WTI | 91.89 | +5.83% | +40.83% | 86.83 | 92.82 | 87.32 | 282,178 |
| IRON ORE | 161.91 | — | +64.76% | 161.91 | 161.91 | 1 | |
| GOLD | 4,053 | -2.26% | +19.42% | 4,147 | 4,144 | 4,043 | 129,086 |
| SILVER | 58.07 | -3.25% | +47.84% | 60.02 | 60.36 | 57.32 | 29,020 |
| LITHIUM | 69.28 | +0.41% | +59.37% | 69.00 | 69.68 | 68.65 | 89,430 |
| SOY | 1,245 | +0.95% | +23.76% | 1,233 | 1,249 | 1,236 | 103,208 |
| CORN | 487.50 | +5.52% | +22.33% | 462.00 | 489.50 | 483.00 | 153,238 |
| WHEAT | 700.50 | -0.74% | +29.60% | 705.75 | 710.25 | 693.00 | 57,010 |
| COFFEE | 309.70 | -2.19% | +2.77% | 316.65 | 321.30 | 308.25 | 9,677 |
| SUGAR | 14.67 | -0.47% | -9.67% | 14.74 | 14.90 | 14.66 | 36,486 |
| ORANGE JUICE | 145.20 | -3.39% | -56.86% | 150.30 | 148.80 | 144.10 | 236 |
| COTTON | 81.53 | +2.08% | +22.38% | 79.87 | 81.75 | 79.75 | 15,710 |
| BEEF | 220.75 | -1.10% | -2.76% | 223.20 | 221.90 | 217.38 | 14,291 |
| CATTLE | 339.30 | -0.55% | +2.35% | 341.17 | 340.50 | 333.00 | 7,188 |
| COCOA | 5,298 | -0.56% | -37.23% | 5,328 | 5,411 | 5,165 | 12,247 |
| PETR4 | 43.18 | +1.41% | +35.10% | 42.58 | 43.49 | 43.10 | 13,364,800 |
| VALE3 | 76.22 | +1.49% | +32.67% | 75.10 | 77.07 | 74.51 | 8,919,900 |
| SUZB3 | 42.08 | -1.36% | -18.69% | 42.66 | 42.82 | 42.06 | 991,400 |
| KLABIN | 17.60 | -1.84% | -4.94% | 17.93 | 17.92 | 17.59 | 1,510,800 |
| SLCE3 | 13.97 | +0.07% | -12.94% | 13.96 | 14.06 | 13.82 | 1,270,500 |
| ABEV3 | 15.92 | -1.30% | +17.22% | 16.13 | 16.11 | 15.88 | 7,888,700 |
| ITUB4 | 42.38 | -1.21% | +23.37% | 42.90 | 42.87 | 42.32 | 13,853,600 |
| BBDC4 | 18.75 | -1.16% | +18.07% | 18.97 | 18.99 | 18.68 | 8,786,300 |
| BBAS3 | 20.91 | -0.85% | +3.41% | 21.09 | 21.08 | 20.78 | 12,509,500 |
| B3SA3 | 15.59 | -1.95% | +16.36% | 15.90 | 15.82 | 15.58 | 18,436,600 |
| WEGE3 | 45.16 | -3.38% | +18.73% | 46.74 | 46.86 | 44.68 | 8,232,600 |
| PRIO3 | 61.11 | +2.24% | +43.84% | 59.77 | 61.35 | 60.56 | 3,454,100 |
| RENT3 | 36.91 | -0.62% | +1.99% | 37.14 | 37.19 | 36.03 | 9,757,100 |
| AZZA3 | 17.53 | -1.57% | -52.75% | 17.81 | 17.71 | 17.23 | 1,118,500 |
| CSNA3 | 5.40 | +0.37% | -38.54% | 5.38 | 5.61 | 5.32 | 6,813,500 |
| GGBR4 | 24.10 | +0.17% | +39.90% | 24.06 | 24.41 | 23.83 | 2,778,500 |
| ENEV3 | 25.56 | -1.58% | +82.77% | 25.97 | 25.80 | 25.45 | 1,481,100 |
| LREN3 | 13.31 | -1.70% | -24.50% | 13.54 | 13.48 | 13.28 | 3,097,700 |
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