Stocks Climb Before Fed Minutes, Oil Continues to Fall; Producer inflation in Brazil and other market problems today

World markets start to be positive this Wednesday (4), pending the release of the minutes of the latest meeting of the Open Market Committee (FOMC), the Federal Reserve (Central Bank of the United States of America), among other indicators of American economic activity.

Investors are looking for more information on the pace of the Fed tightening and the health of the world’s largest economy.

In addition, job openings and job turnover data, better known as JOLTS, and ISM manufacturing data will also be released today in the US.

In Brazil, investors are awaiting the producer price index and the Purchasing Manager’s Index (PMI) for services, while watching political news.

The Ministry of Mines and Energy sent to the Council of Petrobras (PETR4) the appointment of Jean Paul Prates to the presidency of the state-owned company. The official appointment will be formalized after the procedures at the Civil House of the Presidency of the Republic.

Furthermore, according to sources interviewed by the Valor newspaper and the Reuters agency, Caio Paes de Andrade resigned as president of Petrobras last Friday (30) and will remain in office until a successor is defined. Political news is still on the radar with Ibovespa accumulating a 5.07% decline in the first two sessions of the year as investors reacted badly to the government’s first measures.

1. World Scholarships

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US futures indices advanced on Wednesday morning (4) after a negative start to the year, with investors awaiting the release of the Fed minutes, looking for signs on the direction of monetary policy in the country.

At its last meeting, on December 14, the Fed raised the basic interest rates of the US economy by 50 basis points, reducing the pace of monetary tightening.

The December jobs report due on Friday (6) will also be closely watched as it is the last reading on the labor market before the February 1 Fed meeting.

See how the futures markets performed:

• Dow Jones Futures (US), +0.23%
• S&P 500 Futures (US), +0.34%
• Nasdaq Futures (US), +0.56%

Asia

Asian markets closed higher, with the exception of Japan’s Nikkei, with investors also awaiting the minutes of the latest US Federal Reserve meeting.

The Japanese stock market fell after au Jibun Bank Flash Japan Manufacturing’s Purchasing Manager’s Index (PMI) fell further in December.

Hong Kong’s Hang Seng index, on the other hand, led gains in the region, jumping 3.08%, as China’s technology, healthcare and real estate stocks jumped after China’s regulatory commission for banks and the insurers approved an expansion plan for Alibaba.

• Shanghai SE (China), +0.22%
• Nikkei (Japan), -1.45%
• Hang Seng Index (Hong Kong), +3.22%
• Kospi (South Korea), +1.68%

Europe

European markets traded higher, extending gains from a day earlier when they were boosted by lower-than-expected inflation data from Germany in December, falling to 9.6% year-on-year. Inflation data from France will be released on Wednesday.

In plus inflation data from the region, the consumer price index in Switzerland rose 2.8% year-on-year and fell 0.2% in December.

Investors from the old continent are also awaiting the publication of the minutes of the US Central Bank.

• FTSE 100 (UK), +0.24%
• DAX (Germany), +1.17%
• CAC 40 (France), +1.29%
• FTSE MIB (Italy), +0.69%

Goods

Oil prices fell, extending losses from the previous session, as investors braced for the Federal Reserve’s December policy meeting minutes.

The US CB raised interest rates by 50 basis points (bps) in December, following four consecutive hikes of 75bps each. If the Fed ramps up rate hikes, it could slow the economy and hurt fuel consumption.

Iron ore prices are still falling in China, due to the increase in Covid cases in the country.

• WTI Crude Oil, -2.04%, to $75.36 a barrel
• Brent, -2.11%, at 80.37 dollars a barrel
• Iron ore traded on the Dalian Stock Exchange fell 0.35% to 846.50 yuan, or $122.99

bitcoins

• Bitcoin, +1.19% to $16,852.25 (24 hours ago)

2. Schedule

This Wednesday’s agenda is marked by the publication of the minutes of the last meeting of the Open Market Committee (FOMC), the Copom of the American Central Bank. At its last meeting, on December 14, the Fed raised the basic interest rates of the US economy by 50 basis points, reducing the pace of monetary tightening. Also in the USA there is the JOLTS report, with the number of open positions.

Here, investors are waiting for the Producer Price Index and the Purchasing Manager’s Index (PMI) for services.

Brazil

8.30am: Fernando Haddad, finance minister, to meet with Isaac Sidney/Febraban

9: Producer price index

9:30am: Haddad to meet president appointed by Caixa

10: PMI Services

2.30pm: Weekly FX stream

United States of America

12:00: Job offers – JOLTs

12: ISM PMI

16: Minutes of FOMC meeting

6.30pm: API oil stocks

China

10.45pm: PMI

3. Economic news

Alckmin receives a priority agenda from the industry

The vice president and candidate Minister of Industry, Commerce and Services, Geraldo Alckmin, went yesterday to the headquarters of the National Confederation of Industry (CNI), where he received from the hands of the president of the institution, Robson Braga de Andrade , a series of 14 priority proposals in the sector for the first 100 days of government, informs the newspaper Valor.

In addition, Andrade sent Alckmin a list of 18 priority projects being developed by the National Congress. Among the projects are the tax reform (PEC 110/2019), the modernization of the electricity sector (PL 414/2021), the regulation of the carbon market (PL 2148/2015) and the legal framework for environmental licensing (PL 2159/ 2021).

It should be noted that MP Marina Silva (Rede) and Alckmin are currently taking over the Ministries of Environment and Development, Industry and Foreign Trade (MDIC) respectively. Marina and Alckmin will participate in the events at Palazzo Planalto to mark the change in command of the folders.

4. Political news

The public pension in the country is not in deficit, says Lupi

The Minister of Social Security, Carlos Lupi, stated this Tuesday 3 that the government must discuss what he called “anti-reform of the Social Security”, referring to the changes to the social security system implemented in 2019, during the government of Jair Bolsonaro (PL). According to him, the portfolio will demonstrate with data that the country’s public pension is not in deficit.

“I want to form a quadripartite commission, with workers’ unions, employers’ unions, pensioners and the government. We need to thoroughly discuss what this anti-reform of the Social Security was about,” he said, at the Ministry’s transfer ceremony in Brasilia.

Lupi said the government wants all the funding that is constitutionally earmarked for the social security system to be included in the INSS budget. “Everything is forgotten to induce the population to lie. Social security is not in deficit, and I will prove it with numbers, data and information ”, he commented.

covid

Brazil recorded 203 covid-19 deaths in the past 24 hours on Tuesday, for a total of 694,235 since the start of the pandemic.

With that, the moving average of deaths over the past 7 days is 138. Compared to the average 14 days ago, the change was 0%.

In total, the country recorded 26,211 new Covid-19 diagnoses in 24 hours, completing 36,397,820 known cases since the start of the pandemic.

Petrobras (PETR3;PETR4)

Petrobras received a letter from the Ministry of Mines and Energy on Tuesday, notifying that Senator Jean Paul Prates will be appointed to serve as president and member of the company’s board of directors.

The official appointment will be formalized after the procedures at the Civil House of the Presidency of the Republic.

Furthermore, according to sources interviewed by the Valor newspaper, Caio Paes de Andrade resigned as president of Petrobras last Friday (30) and will remain in office until a successor is defined.

Objective (GOLL4)

Gol airline (GOLL4) reported that it expects a loss per share of BRL 2.3 in the fourth quarter of 2022 (4Q22).

The Ebitda margin (Ebitda on revenues) for the period should be around 20%.

Revenue per unit passenger (PRASK) is expected to grow 20% in the last quarter of last year compared to 4Q21.

Demand is expected to increase by 27% and capacity by 31% in 4Q22 compared to the same period in 2021.

(With Estadão, Reuters and Agência Brasil)

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