The stock market is currently falling and is on track to close the first quarter of 2024 with significant losses after reaching 134 thousand points on the last day of December, a record nominal level.
Uncertainties regarding the start and extent of the interest rate cutting cycle in the United States pushed emerging market risk assets downwards.
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Thus, at 10:20 am this Thursday (28), the Ibovespa was down 0.28%, at 127,333.81 points, heading towards reversing the previous trading session’s gains. Thus, the index accumulates a drop of almost 4% in the year.
Dolar today
At the same time, the dollar rose 0.23%, to R$5.0034, with an annual increase of more than 3% until then.
Likewise, the DXY, which measures the global performance of the dollar, advanced 0.07%, to 104.42 points.
Inflation and economic growth in focus
Released by the Central Bank this Thursday morning, the RTI (Quarterly Inflation Report) showed adjustments in some indicators. In this sense, the prices of underlying services, which were already attracting investors’ attention, were revised upwards.
Even so, the text indicates a lower chance of exceeding the inflation target.
On the other hand, the Central Bank also revised the GDP, now expecting to close 2024 with an increase of 1.9%, but heading towards even higher numbers, according to Paulo Gala, chief economist at Master bank.
“After this data from January and February, growth is above 2%, with emphasis on very strong data from services and retail and, yesterday, Caged also came in very strong, with job creation in February well above expectations, one of the best performances of the last ten years”, highlights the economist.
However, data from the Continuous PNAD (National Household Sample Survey), released this Thursday (28) by IBGE, show that the unemployment rate in Brazil reached 7.8% in the quarter ending in February 2024. This result represents an increase of 0.3 percentage points compared to the quarter ending in November 2023.
The general picture, according to Gala, is of a strong economy for the remainder of the year, but with reservations regarding the behavior of inflation, which could change the fate of interest rates in the country.
“O forward guidance already changed. The Selic will drop to 10.25% at the May meeting and, after that, there is no way to know what will happen (with interest rates)”, he warns.
Abroad moves the stock exchange today
In the United States, the short vertices of future interest rates are in the spotlight as they registered a sharp increase following comments from Christopher Waller, from the Fed, suggesting a possible postponement or reduction in the number of interest rate cuts.
He said he thought it was appropriate to reduce the total number of rate cuts or postpone them into the future in response to recent data.
“Still, stock markets are poised to close with impressive gains for the quarter. The MSCI global equity index is poised to record an increase of more than 7% this quarter, driven by stock market rallies and the growing adoption of artificial intelligence technology,” Guide highlights in a report.
The stock market today should also be impacted by unemployment insurance claims data in the United States. The GDP revision, which grew 3.4%, above the previous estimate, the Chicago PMI and data from the University of Michigan are other highlights that could affect the Ibovespa.
On Friday, with the markets closed, the main data of the week will be released, the PCE deflator. In addition, there will be a speech by Fed President Jerome Powell.
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