After Lula's re-election, Focus and Copom dictate the market's mood; US election enters the radar
Ibovespa and future interest rates react to Focus's new projections, while investors await the Selic decision and the US midterm elections.
BY THE X-TRADER NEWS NEWSROOM · REPORTING FROM MONEY TIMES · 3 MIN
November begins with the Brazilian market divided between two agendas. According to Money Times, Ibovespa follows the Focus Report in the first trading session of the month, after the All Souls' Day holiday, with investors reviewing estimates after Lula's (PT) re-election. In the same week, the Copom begins its meeting, with a decision scheduled for this Wednesday (4), and the United States goes to the polls in mid-term elections.
The predominant expectation, according to Money Times, is for the Selic to remain at 13.75% p.a. For InfoMoney, the hypothesis that the cycle of cuts ends at this level seemed distant until the eve of the second round. The Focus, which presents market projections, is now read in light of this change in scenario.
The post-election week has already left its mark on prices. According to InfoMoney, the Ibovespa had, in the five trading sessions following the re-election, its worst weekly drop since March 2020. In the same period, the dollar rose and future interest rates soared, a movement that suggests a greater weight of the fiscal issue and inflation in the pricing of assets.
On the American side, Exame reports that this Tuesday's dispute (3) chooses 435 seats in the Chamber and 35 of the 100 in the Senate, and that surveys indicate a Democratic advantage. The result, according to the same publication, defines Donald Trump's governability until 2028. Money Times reports that the market is also monitoring employment data before the October payroll, and Investing.com records a fall in the FTSE 100 with a global technological defeat, with the BoE also on the radar.
What is at stake is predictability. For those who analyze public accounts with a fiscal responsibility lens, reviewing projections after an election shows how much the market is willing to charge for the risk. If the Selic is maintained and the cut cycle ends at 13.75%, the discussion stops being when the interest rate starts to fall and becomes how long it stays high.
What changes for the investor
For those who invest in the stock market, interest rates and the dollar, three variables deserve attention: the Copom decision on Wednesday, the reading of the new Focus projections and the results of the polls in the United States. Higher future interest rates tend to weigh on the shares of companies that are more dependent on credit and on the present value of distant flows, which includes a relevant part of the Nasdaq. The rise in the dollar changes the return in reais for those who have assets abroad. This article does not recommend the purchase or sale of any asset or project quotations; it describes the channels through which each event can reach the wallet.
Automatically translated from Portuguese.
