June 28, 2022
Stocks drop sharply with Covid virus in China and expectations of higher interest rates;  Oil and crude are collapsing and more of the most prominent markets today

Stocks drop sharply with Covid virus in China and expectations of higher interest rates; Oil and crude are collapsing and more of the most prominent markets today

New York and European stock futures fell, while Asian markets closed lower on Monday (25), on the back of potential weak global growth, higher interest rates and the COVID-19 shutdown in China.

The world’s second-largest economy is struggling to contain the worst outbreak of the virus despite a tight lockdown in its largest city, Shanghai. Over the weekend, Beijing warned that the virus had been spreading undetected for nearly a week.

On Wall Street, investors are weighing the possibility of higher interest rates as they prepare for what will be the busiest week yet in corporate earnings season. About 160 companies in the S&P 500 are due to report earnings this week, and all eyes will be on reports from major tech companies including Amazon, Apple and Alphabet, the parent company of Google, Meta Platforms and Microsoft.

Investors are also looking forward to a key inflation gauge this week. The personal consumption expenditures index is due to be released on Friday before the bell. In February, the PCE core jumped 5.4%.

It should be noted that last week Ibovespa closed down 4.39%, only on friday It fell 2.86% to 11,1077.51 points, the lowest closing level since March 15 and the lowest daily level since November 26. On Friday, the trading dollar rose 4%, trading at 4.804 Brazilian real in buying and 4.805 Brazilian real in selling, amid signs of a more expressive rise in interest rates in the United States.

In Europe, Emmanuel Macron He defeated his opponent, Marine Le Pen In Sunday’s election, to secure a second term as President of France.

Meanwhile, oil prices opened the week sharply lower on global growth concerns.

On the corporate front, we’re highlighting Vale’s balance sheet, next Wednesday, after the market closes. On the same day, Petrobras will release operating previews for the first quarter. On Thursday, Oi will release its balance sheet that still points to the fourth quarter of 2021.

In the indicators, Consumer Confidence and the Weekly IPC-S were released, with the Refinitiv consensus up 1.51%.

Check out the highlights:

1. Global Scholarships

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US index futures are dropping this morning as investors assess the possibility of a rate hike. Since Thursday, risk aversion has gained strength in the market, after Federal Reserve Chairman Jerome Powell We mentioned that a 50 basis point hike is on the table For the upcoming meeting of the Federal Open Market Committee (FOMC). In addition, European Central Bank President Christine Lagarde said in an interview on Friday that she “sees a strong opportunity to raise interest rates this year.”

Wall Street is also bracing for a week full of corporate earnings, including reports from major tech companies like Amazon and Apple.

The market is still watching Twitter, which is said to be re-examining its bid to buy Elon Musk after the billionaire investor revealed that it had raised $46.5 billion in funding, according to information from the Wall Street Journal, citing unnamed sources.

Watch the performance of futures markets:

  • Dow Jones Future (USA), -1.06%
  • S&P 500 futures contract (US), -1.12%
  • Nasdaq Future (USA), -1.01%

Asia

Asian markets closed lower as Chinese stocks fell sharply as the Chinese government struggled to contain the worst outbreak of the virus despite a tight lockdown in its largest city, Shanghai.

China, the world’s second-largest economy, is struggling to stem the worst outbreak of Covid-19 in two years with severe lockdowns and mass testing, while maintaining a policy of no virus spread that has damaged the economy and morale. Shanghai, the country’s largest city, recorded its first death on April 18, although thousands of cases were discovered daily in recent weeks.

  • Shanghai SE (China), -5.13%
  • Nikkei (Japan), -1.90%
  • Hang Seng Index (Hong Kong), -3.73%
  • Kospi (South Korea), -1.76%

Europe

European markets fell sharply as global stock markets continued selling into the new trading week amid concerns over Covid-19 in China.

Investors in Europe are also digesting the results of Monday’s French presidential election and keeping an eye on the latest developments in Ukraine.

The Russian invasion of the country entered its third month on Sunday. A conflict that has killed thousands and led to the worst refugee crisis in Europe since World War II.

  • FTSE 100 (UK), -2.25%
  • Dax (Germany), -1.82%
  • CAC 40 (France), -2.34%
  • FTSE MIB (Italy), -2.14%

goods

Oil prices fell on Monday as the Covid-19 shutdown in China hurt demand, even as the European Union considers a ban on Russian oil that would restrict supply.

Iron ore prices fell sharply after China’s steel consumption in March fell 9.5%.

In Shanghai, even after weeks of movement restrictions, authorities were unable to control the outbreak as expected, and over the weekend, bars and bars surrounded entire buildings. In Beijing, cases are also spreading and concern is growing about possible lockdowns in the city, which has led to a strong supply rush.

  • West Texas Intermediate crude, -4.58% at $97.39 a barrel
  • Brent crude rose to -4.61% to $101.73 a barrel
  • Iron ore traded on the Dalian Exchange is down 10.73% at 794.5 yuan, or 121.10 US dollars.

Bitcoin

  • Bitcoin, -3.30% to $38431.78 (24 hours ago)

2. Schedule

The last week of April arrives with Loaded agenda, especially in the corporate field. But in addition to several balance sheets and shareholder meetings scheduled for the next few days, expectations for inflation data are still giving the business a heads up. In this sense, the most awaited data for the week will be released next Wednesday (27): a preview of the Consumer Price Index (IPCA-15), referring to the first half of April.

Itau expects a 1.86% increase in the monthly comparison, while Bradesco expects a 1.84% rise, still pointing to current inflation at high levels. The reading will, again, be under managed price pressure, mainly reflecting Petrobras’ adjustment announced in mid-March.

This Monday (25) the report of the most important March 5 (9 am) and the frequency distribution for the same month (12 pm Brasilia time) will be available. BC also reported that it will publish on Monday (25th), 3pm, its March savings report and a preview for April, and possibly even the 15th.

Brazil

8:00 a.m.: IPC-S weekly, consensus high 1.51% monthly

8 a.m.: Consumer Confidence in April

United States of America

9:30 am: Chicago Fed National Activity Index for March

11 a.m.: The Dallas Fed Business Activity Index for April

3. CPI threatens to lock up the Senate

With the aim of preventing the opening of a Parliamentary Commission of Inquiry (CPI) that would investigate irregularities in the work of evangelical priests with the Ministry of Education (MEC), the Paulsonian rule was established for the creation of three other CPIs, with subjects ambiguous and unrelated to the current administration. Unlike the opposition, which is struggling to reach the necessary 27 signatures (it currently has 25 supporters), the ruling base has already exceeded that number in all of its requests. Information from the Valor newspaper.

The goal, according to sources heard by Valor, is to isolate Pacheco. Either you don’t accept any CPI or you have to accept them all.

Barroso condemns the use of the armed forces to discredit the electoral process

The Minister of the Federal Supreme Court (STF), Luis Roberto Barroso, said today that there is an intention in the Brazilian political scenario to use the armed forces to attack the electoral process in the country. He again defended the integrity of electronic voting machines, and condemned attempts to politicize the army, noting that the armed forces, so far, have resisted being the subject of “political agitation.”

Moraes decides the fines for Daniel Silvera

Following a presidential pardon for Representative Daniel Silvera (PTB-RJ), who was sentenced by the Federal Supreme Court to eight years and nine months in prison, Minister Alexandre de Moraes will on Monday set a fine on the MP. Failure to comply with the precautionary measures imposed by the court.

Nurses salary limit

The chamber’s president, Arthur Lyra, signed an agreement to vote on May 4 to create a national minimum salary for nurses. There is an overwhelming majority among parliamentarians to approve the proposal, although doubts remain about how the bill will be paid. The Chamber estimates an additional cost of at least R$16 billion for public agencies, health plans, and charitable and private hospitals.

A dead end on the third road

In another sign of the difficulty of the so-called Third Way parties to reach an understanding in the presidential race, leaders of MDB, PSDB, União Brasil and pre-translation candidates have decided to postpone a dinner that will take place on Monday in São Paulo. To define the rules and the collective calendar.

A memo from the advice of former Governor João Doria, a former PSDB candidate, said the meeting was postponed at the request of Senator Simon Tebbet (MDB-MS) and Representative Luciano Pivar (UB-PE), both pre-candidates. Doria said in her statement that the moment requires “unity,” and Toukan said: “Separated, we will be defeated, and this only interests the extremists.”

So far, the three pre-candidates have not come to an understanding on the criteria for selecting the name “Third Way” to run for the Palácio do Planalto.

4. Covid

And last Sunday (24) Brazil recorded 38 deaths and 3,543 cases of Covid-19 virus within 24 hours, according to information from the Media Union, at 8 pm.

The 7-day moving average of Covid deaths in Brazil is 99, down 32% compared to the level of 14 days before that.

The seven-day moving average of new cases was 13,902, which is a 38% decrease from the previous 14-day level.

It reached 1,633,26,952 people fully vaccinated against Covid in Brazil, equivalent to 76.57% of the population.

The number of people who received at least the first dose of vaccines was 177,182,940, representing 83.06% of the population.

The booster dose was given to 86,186,500 people, or 40.4% of the population.

5. Corporate radar

electrobrass (ELET3;ELET6)

Eletrobras proposed to pay dividends in the total amount of R$1.340 billion, equivalent to 1.99153557854615 per Class A preferred share and BRL 1.49365168208243 per Class B preferred share, and to R$0.71578248571496 per common share, on the basis of December 31, 2021 Payment will be made until December 31, 2022.

The updated per-share amounts of the relevant dividend will be disclosed in a timely manner by the Company at the time it is paid, ensuring that the Company’s shareholders who hold Class A and B preferred stock and common stock are listed in the shareholding rule on April 22 2022, the date of its resolution, and as of April 25, 2022, inclusive, Class A and B preferred shares and ordinary shares issued by the Company will be traded “without entitlement” to these dividends.

Cirella (CYRE3)

Cyrela’s Board of Directors (CYRE3) has agreed to pay a dividend of R$217.1 million, equivalent to R$0.5647788378 per share.

IRB (IRBR3)

The IRB reported that he scored a Net loss of R$50.9 million in February 2022compared to a profit of R$20.8 million in February 2021.

But in the first two months of 2022, cumulative net income was R$63.2 million, compared to R$38.8 million net income in the same period in 2021.

(with Estadão, Reuters and Agência Brasil)

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