With a fall, Ibovespa interrupts a sequence of gains

Last Tuesday (16), the Ibovespa fell 0.16% on the day, which is equivalent to a loss of 210.58 points and interrupted a series of 11 consecutive days of growth (the index was growing every day). If it had closed the day on the rise and reached 12 trading sessions in the black, this would have been a record that has not happened in 27 years.

In the early afternoon, the index showed signs that it could continue rising, however, two factors prevented the Ibovespa from reaching the record: shares of Vale, which is considered one of the largest companies in Brazil, fell by 1.05% and the fiscal situation in Brazil created a climate of uncertainty in the market.

The details of what happened:

The price of iron ore, which is Vale's main product, was falling. At the same time, there were concerns about the Chinese economy, which is a major buyer of iron ore. Companies that produce steel also saw their shares fall due to the fall in the price of iron ore. Unimas and CNS fell by 0.37% and 2.67%.

Regarding the Brazilian fiscal situation, early Tuesday afternoon (16), news emerged that President Lula was not convinced that it was necessary to make cuts of R$15 to R$20 billion in the government budget. “First, I have to be convinced whether or not there is a need to cut. You know I have a difference of opinion with the market people. Not everything they treat as an expense I treat as an expense.”, said the President of the Republic in an interview with TV Record that aired on Tuesday.

Still in the interview given to TV Recorde, Lula said that he will do whatever is necessary to comply with the fiscal framework. The president says that while still campaigning, he mentioned creating a country with political, legal, fiscal, economic and social stability.. “This responsibility, this commitment — I can say it to you as if I were saying it to my son, to my wife — I didn't learn it at college, I bring it from the cradle”. And he ends the interview by saying that “It’s just a matter of vision. You are not obliged to set a goal and achieve it if you have more important things to do. This country is very big, this country is very powerful. What is small is the minds of the leaders of this country and the minds of some speculators.”

Dollar quote:

The dollar was falling and apparently rose after Lula's speech, but at the end of the day the dollar closed down 0.30% at R$5.42. The DIs (future interest rates) continued to fall.

See the indicator of Brazilian companies:

• Petrobras: shares fell 0.26% with the bank maintaining a neutral recommendation;
• Retail sector: stores such as Magazine Luiza and Lojas Renner also fell by 4.88% and 0.15% respectively.
• Itaú and Bradesco: banks prevented Ibovespa from continuing to fall. JPMorgan declared its preference for Itaú, but both Itaú and Bradesco closed the day in the positive with 0.60% and 0.32%.
• WEG and ENEVA: Shares also rose 0.37% for WEG and 0.23% for ENEVA.
• CBA: Remained stable.

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On the international front, the confirmation of Donald Trump as the US presidential candidate and the choice of JD Vance are worrying Europeans. Wall Street indexes, on the other hand, were not affected by politics, but rather by the 2Q24 financial results and economic data. Morgan Stanley and Bank of America exceeded expectations, leaving investors excited. Retail sales were better than expected in June. As Quincy Kroby, chief global strategist at LPL Financial, tells CNBC, “Investors prefer the launch of a Fed easing cycle to begin with a still-solid economic outlook.”

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