Thursday’s Morning Call: Brazilian Market Insights Before Opening
The Ibovespa in São Paulo closed slightly down on Wednesday amid domestic asset depreciation and global risk aversion.
Despite positive momentum from oil exporters, rising domestic interest rates and disappointing earnings from major US tech companies weighed on the market.
The index fell 0.13%, closing at 126,423 points. It hit an intraday low of 126,218 points and a high of 126,822 points.
The financial volume traded was R$13.82 ($2.5) billion on the Ibovespa and R$18.16 billion on the B3 exchange.
Interest rate-sensitive companies saw the largest declines. Multiplan ON fell 4.35%, and Magazine Luiza ON dropped 4.19% after Bradesco BBI cut its target price and reiterated a neutral recommendation.
Carrefour ON led losses, plunging 7.25% after reporting a first-half profit of R$25 million, a 97.1% year-over-year decline.
Despite falling iron ore prices, Vale ON rose 0.61% as investors seized a buying opportunity.
Higher oil prices positively impacted commodity exporters. PetroReconcavo ON increased 3.76%, and Prio ON advanced 5.02%.
Petrobras shares rebounded, closing 1.01% higher.nced 5.02%. Petrobras shares rebounded, closing 1.01% higher.
In a dynamic shift, the U.S. dollar escalated by 1.27%, reaching R$5.65, marking the second highest closing rate of the year.
This surge reflects broader economic currents, turning Wednesday into a pivotal day for financial markets.
Key Focus Areas
Santander’s Results
Santander (SANB11) released its results on Wednesday and held a press conference to discuss its second-quarter performance.
In the second quarter of 2024, Santander Brasil secured a managerial net profit of R$3.332 billion ($590.5 million).
This represents a 10.3% increase from the previous quarter and a significant 44.3% year-over-year surge.
Minister Haddad’s Statement
Finance Minister Fernando Haddad emphasized the need for the super-rich to pay fair taxes.
He stated that taxing Brazilian billionaires at 2% could raise $200 billion to $250 billion annually.
US Market Performance
Major New York indices closed sharply lower, with the S&P 500 seeing its worst performance since December 2022, driven by significant losses in tech stocks following disappointing earnings reports.
The Dow Jones fell 1.25%, closing at 39,853.87 points, while the S&P 500 dropped 2.31% to 5,427.13 points. The Nasdaq declined 3.64%, ending at 17,342.41 points.
Decline in Tech Stocks
Tesla’s shares dropped 12.3% after the electric vehicle manufacturer reported its second consecutive quarterly profit decline.
Alphabet, Google’s parent company, fell 5.04% after its earnings report. Other tech giants also faced losses, including Nvidia (-6.8%), Meta Platforms (-5.6%), and Amazon (-2.99%).
Today’s Economic Data Releases
- 5:00 AM (Brazil): Weekly IPC Data – Provides early insights into consumer price changes.
- 5:00 AM (Germany): IFO Economic Sentiment Survey – Assesses the current business climate, important for gauging economic health in Europe.
- 8:00 AM (Brazil): Consumer Survey Results – Offers insights into consumer confidence, an indicator of potential spending and economic activity.
- 8:30 AM (Brazil): Press Notes on External Sector IDP and Current Transactions – Details financial flows and transactions, crucial for understanding international economic interactions.
- 9:00 AM (Brazil): IPCA-15 July Inflation Preview (IBGE) – Provides early indicators of inflation trends, crucial for economic policy and investment decisions.
- 9:30 AM (USA): Q2 GDP Data – A critical measure of economic growth and health in the U.S.
- 9:30 AM (USA): Weekly Unemployment Claims – Indicates labor market conditions, reflecting on employment trends.
- 9:30 AM (Brazil): June External Sector Statistics (Central Bank) – Offers insights into trade balances and foreign transactions, essential for assessing the economic impact of international trade.
Corporate Updates
Vale (VALE3): Q2 earnings expected today, significant for commodity markets.
Key Reports and Developments
Economic and Sector Highlights
- Brazil’s EV Sales Surge: Electric vehicle sales have soared, led by popular models like the BYD Dolphin and boosting the automotive industry.
- Brazil’s Mineral Industry: Reported a significant earnings rise to R$129.5 billion, aided by favorable USD exchange rates.
- Bottlenecks at Santos Port: A major challenge causing over US$21 billion in export losses due to infrastructural inadequacies.
- Oil Prices Rally: A significant drop in U.S. oil inventories prompted a price increase, with WTI and Brent crude both climbing.
- Sector Contrast in the U.S.: The service sector booms while manufacturing shows signs of contraction.
- Bank of Canada Cuts Interest Rates: A reduction to 4.5%, continuing its normalization policy amidst varied economic signals.
- Energy and Resilience: Neoenergia and Raízen reported strong performances, contrasting with challenges faced by IRB in a volatile quarter.
- Eurozone PMI Decline: Indicates potential trouble, with manufacturing particularly impacted, suggesting economic instability.
Outlook and Strategic Moves
Saudi Arabia’s Strategic Expansion: Efforts to deepen economic ties in Brazil and Chile, with high-level meetings planned to boost the mining and industrial sectors.
These insights are designed to provide a broad perspective on today’s economic, corporate, and market trends, assisting stakeholders in navigating a complex financial landscape.
Wednesday’s Morning Call: Brazilian Market Insights Before Opening
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Brazil Morning Call — Live Board
+0.46%
183,827.59
+0.46%
65,071.30
+0.20%
11,055.91
-0.73%
2,782,561
-0.59%
2,558.92
-0.79%
60,220.45
+0.32%
| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 183,827.59 | +0.46% | +21.85% | 182,991.13 | 168,310 | 167,142 | — |
| USD/BRL | 5.16 | +0.01% | -5.13% | 5.16 | 5.18 | 5.14 | — |
| EUR/BRL | 5.95 | +1.01% | -5.83% | 5.89 | 5.98 | 5.94 | — |
| SELIC | 14.00% | — | — | — | — | — | |
| BRENT | 88.88 | -0.03% | +34.42% | 88.91 | 90.07 | 88.12 | 29,713 |
| WTI | 83.11 | -0.11% | +31.57% | 83.20 | 84.35 | 82.40 | 166,848 |
| IRON ORE | 161.91 | — | +58.10% | 161.91 | 161.91 | 1 | |
| GOLD | 4,461 | +1.78% | +33.20% | 4,383 | 4,503 | 4,421 | 139,824 |
| SILVER | 65.59 | +1.26% | +73.05% | 64.77 | 66.98 | 64.81 | 46,406 |
| LITHIUM | 75.20 | +1.47% | +62.95% | 74.11 | 75.80 | 75.08 | 89,275 |
| SOY | 1,184 | +3.20% | +17.05% | 1,148 | 1,199 | 1,168 | 163,179 |
| CORN | 480.50 | +10.02% | +29.34% | 436.75 | 480.75 | 459.50 | 341,248 |
| WHEAT | 655.00 | +3.93% | +29.70% | 630.25 | 657.75 | 631.50 | 128,793 |
| COFFEE | 317.25 | -5.51% | +0.67% | 335.75 | 321.20 | 313.55 | 21,747 |
| SUGAR | 16.43 | -1.79% | -3.01% | 16.73 | 17.11 | 16.22 | 171,992 |
| ORANGE JUICE | 138.55 | -0.47% | -45.38% | 139.20 | 141.05 | 137.50 | 703 |
| COTTON | 85.03 | +2.33% | +26.78% | 83.09 | 82.90 | 81.96 | 16,546 |
| BEEF | 223.60 | -3.93% | -5.18% | 232.75 | 226.40 | 223.00 | 16,126 |
| CATTLE | 339.10 | -3.16% | -1.82% | 350.17 | 345.50 | 338.60 | 10,164 |
| COCOA | 5,719 | +3.18% | -34.96% | 5,543 | 5,779 | 5,574 | 26,773 |
| PETR4 | 41.64 | -0.05% | +35.19% | 41.66 | 41.97 | 41.15 | 41,499,400 |
| VALE3 | 72.97 | +0.83% | +30.75% | 72.37 | 73.54 | 72.66 | 17,658,000 |
| SUZB3 | 41.33 | +2.35% | -23.55% | 40.38 | 41.48 | 40.35 | 3,914,900 |
| KLABIN | 17.69 | +0.80% | -2.95% | 17.55 | 17.74 | 17.48 | 2,057,400 |
| SLCE3 | 13.34 | +0.30% | -12.25% | 13.30 | 13.42 | 13.20 | 1,454,200 |
| ABEV3 | 14.89 | -0.80% | +21.91% | 15.01 | 15.07 | 14.81 | 16,453,100 |
| ITUB4 | 38.60 | -1.03% | +4.57% | 39.00 | 39.34 | 38.39 | 29,487,800 |
| BBDC4 | 16.85 | +0.36% | +3.50% | 16.79 | 16.90 | 16.67 | 19,416,900 |
| BBAS3 | 19.37 | +0.47% | +0.73% | 19.28 | 19.44 | 19.16 | 11,069,200 |
| B3SA3 | 14.26 | -0.21% | +12.73% | 14.29 | 14.47 | 14.11 | 33,037,800 |
| WEGE3 | 47.59 | +0.49% | +29.99% | 47.36 | 48.08 | 47.36 | 3,364,600 |
| PRIO3 | 59.14 | -0.19% | +50.67% | 59.25 | 59.81 | 58.74 | 3,325,600 |
| RENT3 | 34.68 | -0.09% | +0.84% | 34.71 | 34.96 | 34.35 | 7,979,100 |
| AZZA3 | 15.89 | -2.63% | -53.76% | 16.32 | 16.42 | 15.82 | 1,330,300 |
| CSNA3 | 4.30 | +0.47% | -42.65% | 4.28 | 4.41 | 4.26 | 10,076,100 |
| GGBR4 | 24.69 | +2.19% | +51.38% | 24.16 | 24.85 | 24.18 | 7,047,600 |
| ENEV3 | 24.21 | -1.38% | +70.49% | 24.55 | 24.64 | 23.99 | 9,297,000 |
| LREN3 | 11.87 | -1.33% | -28.65% | 12.03 | 12.17 | 11.83 | 9,683,300 |
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