Indices fell in the U.S. on the backlash after Lula’s victory, with expected inflation and market highlights

Brazilian investors and foreigners investing in the Brazilian stock market will show their reaction this Monday (31) to the election of Luiz Inacio Lula da Silva (PT) for a third term as president. Despite this, opinion polls showed division, with the PT winning by just over 2 million votes and aiming to reunify the country.

A third round to free the market, contested by Jair Bolsonaro (PL), has left the future uncertain, a remote possibility of its happening, as many world leaders and Brazilian officials quickly expressed their support for the decision. Support also came from Bolsonaro allies such as São Paulo’s elected governor, Tarcio de Freidas (Republicans), and the president of the Chamber of Deputies, Arthur Lira (PP-AL).

In the corporate scenario, shares of federal state-owned companies such as Petrobras (PETR3;PETR4), and Banco do Brasil (BBAS3) should deliver a strong fall one day, while balance sheet season continues in full swing. Expression of CSN (CSNA3), Cielo (CIEL3) and PRIO (PRIO3).

In the United States, US futures indices were underperforming today as the market again reacted to higher-than-expected inflation figures in the Eurozone and awaited the Federal Reserve’s (Federin) monetary policy decision, scheduled for next Wednesday.-fair.

The probability of a 75 basis point hike by the Fed is almost certain, with data from the CME Group pointing to an 88.7% chance. However, the December decision is still divided to reduce the occupancy or maintain the increase.

In tomorrow’s indicators, eurozone inflation rose to 10.7% in October from 9.9% in September and was above market forecasts of 10.2%, according to preliminary data from Eurostat.

Economic growth in the European region rose just 0.2% in the third quarter, according to preliminary published data.

Focus Bulletin’s IPCA expectation for this year rose to 5.61% from 5.60% a week ago. In 2023, it will be 4.94% and in 2024 it will be 3.50%. The forecast for higher GDP for 2022 was maintained at 2.76% this year, but raised to 0.64% from 0.63% in 2023 (the fifth week in a row).

Asia Scholarship

Asian stocks ended Monday (31) limited direction. Among the majors, Tokyo posted a nearly 2% gain, with corporates focused, while Shanghai fell, retreating in the official reading of China’s Purchasing Managers’ Index (PMI).

▪️Tokyo — Nikkei: +1.78%

▪️Hong Kong — Hong Kong: -1.18%

▪️Taiwan — Taiex: +1.26%

▪️Korea — Kospi: +1.11%

▪️China — Shanghai: -0.77%

▪️China — Shenzhen: +0.38%

Europe Scholarship

European markets were flat on Monday (31), as investors digested the euro zone’s two key economic indicators.

▪️London – FTSE100: +0.15%

▪️Frankfurt — DAX: +0.10%

▪️Paris — CAC 40: -0.14%

▪️Madrid — Ibex 35: -0.10%

▪️Europe — Stoxx 600: +0.04%

Economic agenda

▪️ After market close, balance sheets from Cielo, CSN, CSN Mineração, PetroRio and Raia Drogasil;

▪️ Germany/Destatis: Retail sales in September (4 hours);

▪️ Eurozone/Eurostat: Preliminary Consumer Price Index (CPI) for October (7am);

▪️ Eurozone/Eurostat: 3Q GDP (7h);

▪️ Focus Bulletin (8:25 am);

▪️ USA/ISM/Chicago: October PMI (10:45 am);

▪️ Denmark: ECB Chief Economist Philipp Lane attends Denmark Bank event (12pm);

▪️ United Arab Emirates: OPEC issues World Oil Outlook report (1:30 pm);

▪️ Weekly Trading Balance (3pm);

▪️ Japan/S&P Global/Bank of Japan: October Industrial PMI (9:30pm);

▪️ China/Gaixen: October Industrial PMI (22:45).

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