European markets start the day positive, driven by financials and clean energy after the US election

This Wednesday, European stock exchanges began trading with gains driven by the financial sector, shortly after the Democrats secured both chambers of the American Congress in the legislative elections. According to InfoMoney, at 6:40 am (Brasília time) the Stoxx 600 rose 0.93%, to 651.64 points, while the banks sub-index advanced 3.3%. Clean energy stocks also stood out, with Vestas up 3.8% and Orsted up 7%.

In Brazil, BTG Pactual adjusted its stock portfolio for November. According to Money Times, Caixa Seguridade (CXSE3) takes the place of Itaú (ITUB4), Axia Energia (AXIA3) leaves to make room for TIM (TIMS3), and Ultrapar (UGPA3) takes over the position previously occupied by Cury (CURY3). The house continued with 35% in exchange, preserved its positions in Petrobras (PETR4), Gerdau (GGBR4) and Embraer (EMBJ3), included new dividend payers and reduced its share in banks and construction companies.

The same survey shows that the bank reduced the risk of its portfolio in the face of uncertainties about the new Lula government. Motiva (MOTV3), Eneva (ENEV3), Rede D'Or (RDOR3) and Sabesp (SBSP3) also appear on the list, and, according to the house, these shares have potential for appreciation of up to 83%.

In the domestic market, the concern is greater. According to Revista Oeste, after Lula's re-election, future interest rates rose, as investors question the government's ability to contain expenses. The increase began on October 26, a Monday, in the first trading session after the second round, and the market fears greater spending without actions that stabilize the public debt.

The consequence appears in the credit. According to the same Revista Oeste, interest rates on real estate financing also rose: Santander, Itaú and Bradesco applied adjustments at the end of October. The combination of rising interest rates and fiscal doubts is the central point for those investing in the country.

Abroad, oil yielded: Brent fell 4%, amid signs of an open diplomacy channel between the USA and Iran. On Monday, November 2, at around 8:14 am, the Stoxx 600 registered an increase of 0.16%, quoted at 647.77 points, while London gained 0.05%, Paris 0.42%, Frankfurt 0.28%, Milan 0.53% and Madrid 1.14%. According to InfoMoney, there is concern about the cost of credit and also about how large companies will make their investments in AI profitable; the text mentions a warning from Fitch, but does not reveal what it says.

What changes for the investor

The framework calls for caution with fiscal policy. Rising future interest rates, readjustments in real estate financing and doubts about controlling spending tend to weigh on interest-sensitive sectors and companies that depend on credit. BTG's portfolio, which reduced banks and construction companies and maintained Petrobras, Gerdau and Embraer, shows how the house is treating this risk. This article is not a recommendation to buy or sell: the outcome will depend on how the government responds to the demand for debt stabilization measures.

Automatically translated from Portuguese.