Bloomberg Línea — O Ibovespa (IBOV) closed with a drop of 1.00%, at 128,188 points, this Thursday (9), with investors reflecting the previous day’s Copom decision, which showed the collegiate divided and a more “hawkish” statement from the Bank Central. The performance went against the New York indexes, which closed higher. O dollar (USDBRL) rose 0.96% and was traded at R$5.14 at closing.
Although the Copom’s 0.25 percentage point cut was expected by a large part of the market, a decision divided by a tight score of five votes to four was a surprise for many economists and managers.
The victorious wing, led by the president of the BC, Roberto Campos Neto, and director Diogo Guillen, opposed the Copom members appointed by president Luiz Inácio Lula da Silva, such as Gabriel Galípolo and Paulo Picchetti, who defended a cut of 0.50 point.
The divergence opened the door for different interpretations of the BC’s stance by the market, including the assessment that the Copom may be more lenient with inflation in the future. The directors appointed by Lula should make up the majority of the board’s members from 2025, with the end of Campos Neto’s term.
“While we believed dissent was highly likely, the 5-4 split was surprising. This indicates a deeply divided committee, making it plausible that more dissent will occur at future meetings. Furthermore, all votes in favor of the more ‘dovish’ decision came from new members, which could affect markets’ perceptions of the committee’s reaction function from 2025 onwards,” wrote analysts from BTG’s macroeconomic research area. (BPAC11), Claudio Ferraz, Bruno Martins and Bruno Balassiano, in a report.
Read too: Copom: economists see ‘hawkish’ statement and uncertainty about next steps
Economists emphasize that they await the release of the Copom minutes next week to have more clarity about the dissenting vote and the direction of monetary policy, a view also shared by economists at Itaú Unibanco (ITUB4).
“The four most recently appointed committee members voted in favor of a 50 basis point cut, despite agreeing with the generally bullish assessment of the inflation outlook. We will certainly know more about the authorities’ opinion with the release of the minutes next Tuesday. At the moment, we expect another movement of 25 basis points at the next meeting, with a non-zero chance of it being the last of the cycle”, stated the Itaú team, led by Mario Mesquita.
In addition to the minutes, investors are now awaiting April inflation data measured by the Broad National Consumer Price Index (IPCA), which will be released tomorrow (10). Concerns about greater price pressure are also growing amid the tragedy in Rio Grande do Sul, whose 425 of its 497 municipalities have reported problems related to the storm. Around 1.5 million people were affected.
Of the 86 Ibovespa assets, 61 closed down. The shares of 3R (RRRP3), Lojas Renner (LREN3), Ultrapar (UGPA3), Cogna (COGN3) and Eletrobras (ELET3) fell and were among the biggest losers of the day.
The shares of large banks also fell and contributed to the negative performance, including Itaú Unibanco (ITUB4), Bradesco (BBDC4), Santander Brasil (SANB11) and Banco do Brasil (BBAS3).
Banco do Brasil (BBAS3) showed a drop in profit and profitability in the first three months of 2024, compared to the fourth quarter. The balance, released last night (8), also revealed the negative impact of exposure to the Argentine market, following the strong devaluation of the peso in December.
Between January and March, the oldest bank in Brazil, founded in 1808, had an adjusted net profit of R$9.3 billion, a drop of 1.5% in the quarterly comparison (R$9.4 billion in the fourth quarter) , but an increase of 8.8% on an annual basis (R$8.5 billion in the first quarter of 2023).
The guidance (projection) announced by the bank is an adjusted net profit of between R$37 billion and R$40 billion in 2024.
Among the positive highlights, the shares of Petrobras (PETR3; PETR4), Vale (VALE3) and Suzano (SUZB3) closed on the rise and were among the main positive contributions. LWSA (LWSA3), Minerva (BEEF3), Rede D’or (RDOR3), Magazine Luiza (MGLU3) and BRF (BRFS3) also advanced and led the gains.
In the United States, the stock market reached its highest level since early April, extending a rally driven by speculation that the Federal Reserve will be able to cut interest rates this year.
Stocks rose as higher-than-estimated jobless claims reinforced bets on an easing of U.S. policy. U.S. initial jobless claims rose last week to the highest level since August, beating estimates.
U.S. policymakers are closely watching labor demand and wage growth as they debate when it might be appropriate to cut interest rates. Federal Reserve Bank of San Francisco President Mary Daly said rates are currently holding back the economy, but it could take “more time” to return inflation to its target.
– With information from Bloomberg News.
