The São Paulo Stock Exchange maintained a positive orientation on Thursday, after the news that President Luiz Inácio Lula da Silva authorized a cut in public spending, in a session that was expected to reduce volumes due to the holidays in the United States.
Around 11:40 a.m., Ibovespa rose 0.44% to 126,215.65 points. The trading volume amounts to 4.7 billion reais.
Finance Minister Fernando Haddad said Wednesday night that Lula had ordered the government to respect the fiscal framework at all costs and had authorized his economic team to cut public spending.
The minister did not mention structural measures to reduce spending, but said the government’s revenue and expenditure assessment report, due July 22, could mean “some contingency and some freeze” on spending.
On another front, according to Haddad, the work of reviewing public spending carried out by the technical area has already identified 25.9 billion reais of mandatory spending that will be cut in the 2025 Budget.
Haddad’s statements in favor of spending cuts confirmed another day of decline for the dollar against the real, as well as for the interest rate curve, favoring stocks sensitive to the Brazilian economy.
According to XP, investors are also eagerly awaiting June U.S. labor market data on Friday. The data is being closely watched to help calibrate bets on Federal Reserve decisions.
“Our base case is for the Fed to begin its easing cycle in December, but we recognize the growing possibility of interest rate cuts starting in September,” the XP team said in a note to clients.
This Thursday, trading sessions on Wall Street will be closed due to the Independence Day holiday in the United States.
HIGHLIGHTS
– ITAÚ UNIBANCO PN appreciated by 0.85%, representing the main support of Ibovespa, while BRADESCO PN had a positive variation of 0.16%.
– VAMOS ON advanced 6.44%, another day among the highlights of the trading session, as it also benefits from a lower interest rate environment, as well as a potential beneficial effect of the Safra Plan given its presence in the agricultural sector.
– MAGAZINE LUIZA ON rose 4.29%, also supported by the more positive context of the Brazilian market as a whole, with the consumer sector index up 1.54%.
– EZTEC ON recorded a rise of 3.92%, a high point of the Ibovespa among construction companies, which also tend to benefit from a calmer scenario in the interest rate market. The real estate sector index rose by 2.3%.
– RD ON fell 1.96%, as analysts predicted that its second-quarter results would present a mixed picture, with strong revenues but weaker margins.
– PETROBRAS PN fell 0.77%, on a day of weakness in oil prices abroad, where a barrel of Brent was valued at $87.29, down 0.06%.
– VALE ON fell 0.33% after a stronger performance a day earlier, colliding with a rally in China’s iron ore futures. The most traded contract on the Dalian Commodity Exchange closed up nearly 1.8%.
Source: Terra
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