Future Ibovespa works close to stability; Wall Street investors are watching the balance sheets of the Fed and banks

Ibovespa futures opened the trading session on Friday (14) with no specific direction. After falling in the beginning of trading, at 9:23 AM (Brazilian time), the index due due in February 2022 started operating with a slight increase of 0.07%, at 106,370 points. The Brazilian index came on the heels of volatility in global markets, as investors were still digesting yesterday’s speech by Federal Reserve Vice Chairman Lael Brainard in the US Senate.

The market interpreted Brainard’s speech as having a harsher tone. You mentioned, for example, that the monetary institution of the world’s largest economy should finalize diminishingBuying bonds, already in the first quarter of this year, after this process is over, the Fed will be ready to raise interest rates.

The speech differed from the speech given by the Foundation’s president, Jerome Powell, the day before, in the Senate as well. At the time, stocks rose after explaining that the stimulus cut could be less severe.

“The period of greater fluctuations presented by the indicators comes after the release of the minutes of the Federal Reserve meeting, which in turn revealed a tougher stance against inflation, indicating an increase in interest rates as early as 2022 and a possible decrease in the size of the balance sheet.” XP Investimentos Analysts, in Morning call.

Investors there are also watching the balance sheet season. Today, Wells Fargo and JP Morgan brought in profits beyond consensus. The former had a net income of $1.38 per share, compared to a consensus of $1.12. The second earned $3.33 per share, more than the expected $3.01.

American stock exchanges operate in one direction. Dow Jones and S&P 500 futures were up 0.21% and 0.07%, respectively at 8:55 am. The Nasdaq fell 0.14%.

In Europe, the trend is quite downward. Germany’s DAX is down 0.63%, France’s CAC 40 is down 066%, and Britain’s FTSE is down 0.04%. The STOXX 600 Index, which includes companies from across the continent, fell 0.61%.

Finally, in Asia, the decline was more pronounced. In addition to the correction caused by declines recorded in Western stock exchanges the previous day, indicators there also suffered from the disclosure of exports in China, with growth slowing, and the Bank of South Korea raising interest rates to 1.25%, returning to pre-pandemic levels.

Japan’s Nikkei is down 1.28%. Mainland China Shanghai 0.96%. HSI in Hong Kong 0.19%. Cosby in South Korea 1.36%.

Iron ore also declined, with the price per ton down 1.43% in the port of Qingdao, at $128.01, and by 2.30% in the port of Dalian, at $113.68.

In the domestic market, interest rates are rising again

Ibovespa Futuro, in addition to tilting the international market, also suffers from the Brazilian scenario.

Interest futures contracts opened the trading session higher, with investors eyeing financial risks as well as data showing that the economy is hotter than expected. DI for January 2023 advanced 1 basis point to 11.95%. As for the month of January 2025, it rose three points to reach 11.24%. It also rose for the month of January 2027 by one basis point, reaching 11.17%.

Pressure from public officials to increase salaries continues. Yesterday representatives of the Federal Revenue Service met with Minister Paulo Guedes, later commenting that the meeting was a disappointment. “We consider this a significant financial risk for this year, as there is no room within the constitutional spending cap for a horizontal salary increase for all occupations for civil servants,” XP comments.

In addition, after the Brazilian Institute of Geography and Statistics reported yesterday that the services sector in November proved to be hotter than consensus, today’s retail data came in as a surprise, with 0.6% growth month-on-month, versus the consensus for a 0.20% decline from Refinitiv. The explanation is that these numbers can put pressure on inflation.

The trading dollar rose 0.12%, and was trading at 5,535 Brazilian reals in buying and 5,536 Brazilian reals in selling. Futures rose 0.11% to R$5554.

Buying opportunity? XP Strategist reveals 6 cheap stocks to buy today. Watch here.