August 19, 2022
Luiza (MGLU3) and Via (VIIA3) magazines up 11%;  Why is business gaining momentum this Tuesday?  - Money Times

Luiza (MGLU3) and Via (VIIA3) magazines up 11%; Why is business gaining momentum this Tuesday? – Money Times

Magazine Luiza shares closed 11.74% higher this Tuesday, at R$2.38 (Photo: REUTERS/Paulo Whitaker)

Main roles retailers in E-Commerce It rose this Tuesday (5), in a move contrary to the strong decline felt by oil companies.

a luisa magazine (MGLU3) closed up 11.74% at 2.38 Brazilian Real. Across (VIIA3) And the American (Amer 3) It also followed the same expressive appreciation trajectory, ending the day with gains of 11.48% and 9.73%, quoted at R$2.04 and R$13.76, respectively.

a IbovespaOn the other hand, it closed down 0.32% at 98,294.64 points. And at its lowest level of the trading session, it fell more than 2% to 96499.42 points, re-establishing the lowest intraday level since November 3, 2020.

Leandro Petrokas, director of research and partner at Quantzed, explains that the stock movement is happening today because the assets have “moved significantly” and underwent a recovery process.

According to Petrokas, with the fall petroleum And measures related to the oil and gas sector, the market believes that inflation may decline, which improves expectations about the central banks’ attitude to expenses.

The market understands this, with the sudden drop in oil prices and goodsdrop in inflation Hence, a softening in regards to BC’s expectations of not having to keep raising rates. As disposable income increases, this favors selling by pieces“, He says.

Is the good news today?

Magazine Luiza’s share decreased by 67.59% in the first half of 2022, becoming one of the most notable negative events in Ibovespa in this period.

Despite a strong rally in the stock market this Tuesday, volatility should follow the retailer – and other companies in the sector – throughout the year.

In addition to the challenging macroeconomic scenario, with a possible recession in the US, the elections in October should put more pressure on stocks.

According to Victoria Minato, an analyst at BenndorfA drop in Magazine Luiza’s stock doesn’t mean the newspaper is cheap.

“The macro moment, both in Brazil and in the world, is not favorable for retail,” he highlights.

The analyst prefers names that generate cash and pay dividends; Companies that manage to perform well even in challenging scenarios, which is not the case in retail.

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