Most European markets and US futures indexes are trading lower, while Asian stock markets closed at a general high on Thursday (5), with investors reflecting on the minutes of the latest Federal Reserve meeting released Wednesday and await more US labor market data.
The Fed draft showed Fed members supporting higher interest rates to tackle inflation.
Also released a day earlier was the Job Openings and Labor Turnover Report, or JOLTS, for November, showing a still strong job market, reinforcing concerns that the Fed could continue to hike interest rates as the job market remains lively.
Investors expect the release of the ADP survey on US private sector job creation at 10:15 ahead of the release of the payroll report on Friday (6).
In these parts, President Luiz Inácio Lula da Silva (PT) has scheduled his first ministerial meeting for tomorrow (6), in which he intends to begin articulating the government, after public disagreements between ministers. It should be noted that, on the eve of, the Ibovespa closed on Wednesday higher, in respite after a more negative start to the year, with Petrobras (PETR3;PETR4) among the main supporters after Senator Jean Paul Prates, appointed by the Union to chair the society, claiming that it will not de-link fuel prices from international values.
Investors should follow the inauguration of Simone Tebet as Minister of Planning and Budget at 10am this Thursday.
On the economic front, data on industrial production for November is available. The Refinitiv consensus calls for a 0.1% decline from October and a 0.8% year-on-year increase.
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1. World Scholarships
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US index futures are trading lower this morning as investors digest the minutes of the latest Fed meeting and await more jobs data.
Notably, the day before, the S&P 500 closed higher after the release of the minutes, which showed US central bank officials focused on controlling inflation, even after agreeing to slow the pace of rate hikes of interest.
Officials attending the December 13-14 Fed monetary policy meeting agreed that the US central bank should continue to increase the cost of credit to control the pace of price jumps, but gradually with the aim of limiting risks to the economic growth. While some financial managers said the minutes included no surprises, the market seemed to be hoping for some sign that the Fed was at least considering easing monetary tightening.
Investors await ADP survey data on private jobs, trade balance and business activity. Fed members Raphael Bostic and James Bullard are also expected to speak today.
See how the futures markets performed:
- Dow Jones Futures (US), -0.27%
- S&P 500 Futures (US), -0.29%
- Nasdaq Futures (US), -0.38%
Asia
Asian markets closed higher, with investors paying attention to US economic data and also reflecting an improvement in China’s Purchasing Managers Index (PMI) for services for December. The Hong Kong S&P Purchasing Managers’ Index also showed less pressure on manufacturing activity.
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Additionally, Singapore’s retail sales rose 6.2% year-on-year in November, down from the 10.3% growth recorded in October.
- Shanghai SE (China), +1.01%
- Nikkei (Japan), +0.40%
- Hang Seng Index (Hong Kong), +1.25%
- Kospi (South Korea), +0.38%
Europe
Most European stock markets are trading lower, reversing some of the gains from the day before, as investors focus on economic data from the region and the latest signals from the US Federal Reserve on inflation and interest rates.
Market makers are expected to release data on Eurozone producer price inflation for November, down 0.9% from October, in line with Refinitiv’s forecast.
European markets closed higher on the eve, with inflation data from France and Germany indicating that consumer price increases in the eurozone are slowing.
- FTSE 100 (UK), +0.15%
- DAX (Germany), -0.30%
- CAC 40 (France), -0.53%
- FTSE MIB (Italy), -0.24%
Goods
After accumulating losses of 9% in the first two sessions of the year, oil prices rose on Thursday (5), with investors taking advantage of the dip to buy futures contracts, given the expectation that long-term fuel demand will remain stable.
Iron ore prices in China drop as Covid spreads across the country, increasing pessimism about commodity prices.
- WTI crude oil, +1.18%, to 73.73 dollars a barrel
- Brent oil, +1.07%, at 78.67 dollars a barrel
- Iron ore traded on the Dalian Stock Exchange fell 1.23% to 840.00 yuan, or $122.17
bitcoins
- Bitcoin, -0.10% to $16,792.37 (24 hours ago)
2. Schedule
This Thursday’s agenda is punctuated by the release, at 10:15, of the ADP survey on US private sector job creation, which advances payrolls on Friday.
In Brazil, today’s leading indicator is November industrial production. The Refinitiv consensus calls for a 0.1% decline from October and a 0.8% year-on-year increase.
Brazil
8am: December occupation background
9am: Industrial production November, with Refinitiv consensus expecting 0.1% drop from October and 0.8% year over year increase
United States of America
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10:15am: Private Work (ADP) for December
10:30am: November trade balance, consensus Refinitiv expects $73bn surplus
10:30am: Weekly Unemployment Claims, with Refinitiv Consent expecting 225,000 claims
11:20am: Speech by Fed Member Raphael Bostic
11:45am: December Services PMI
1.00pm: Weekly oil inventories (IEA).
3:20pm: Speech by Fed Member James Bullard
eurozone
07:00: Producer Price Index for November, expected to fall 0.9% from October and up 27.5% year over year
3. Economic news
The Treasury secretary rules out the explosive debt scenario
The new national treasury secretary, Rogério Ceron, said the new economic team in the Lula government is working to reverse the explosive trajectory of public debt that is emerging in view of the R$ 231 billion deficit projected in this year’s budget Balance.
In his first interview in office, Ceron pledged to avoid debt exceeding the level of 80% of GDP (Gross Domestic Product). “If nothing is done, it could in fact reach an explosive trajectory, but that’s not what will happen,” he told Folha.
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Haddad will announce the first economic measures next week
Finance Minister Fernando Haddad said yesterday (4) that the government will announce the first economic measures next week. He made the statement upon returning to the ministry after meeting President Lula for more than two hours.
Haddad did not provide details on the measures. He just said he’ll be speaking next week.
4. Political news
Lula will hold a ministerial meeting after public disagreements between ministers
President Luiz Inácio Lula da Silva (PT) has scheduled his first ministerial meeting for next Friday (6), in which he intends to start articulating the government, after public disagreements between ministers.
The ministerial meeting was already scheduled: Lula said last week that he intended to hold a ministerial meeting immediately after taking office. But he should serve the president to finish the edges after the recent public disagreements between ministers.
On the first day of his administration, Lula renewed the fuel tax exemption despite Finance Minister Fernando Haddad (PT) having asked the previous government not to renew the measure which was due to expire at the end of last year.
This Wednesday, the ministers of the Civil House, Rui Costa, and of Institutional Relations, Alexandre Padilha (PT), denied that the government is considering reviewing the social security reform approved in 2019, after the Minister of Social Security, Carlos Lupi ( PDT ), criticized the day before what he called “anti-reform”, signaling that he could discuss changes.
The prognosis is for the re-election of the presidents of the Chamber and Senate, says Jaques Wagner
The head of government in the Senate, Jaques Wagner, said yesterday that “the prognosis is for the re-election” of the presidents of the Chamber, Arthur Lira, and of the Senate, Rodrigo Pacheco. “We are well positioned in the Senate and in the House, after all we have approved the Pec,” said Wagner after the meeting with the finance minister, Fernando Haddad. However, he stressed that it is important to “know” the deputies and senators who will take office this year.
Covid
Brazil has recorded 207 deaths from covid-19 in the last 24 hours on the eve, for a total of 694,442 since the start of the pandemic.
With that, the moving average of deaths over the past 7 days is 120. Compared to the average 14 days ago, the change was -11%.
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In total, the country recorded 30,287 new Covid-19 diagnoses in 24 hours, completing 36,428,107 known cases since the start of the pandemic.
The Board of Directors of Eletrobras (ELET3; ELET6) withdrew the proposed repurchase of PNA shares from this Thursday’s AGE agenda, according to a statement published Wednesday evening.
Previously, the Securities and Exchange Commission (CVM) deemed the forced redemption of shares irregular.
The company makes it known that it will study the alternatives on the matter with its consultants and, in due course, will inform the shareholders of the possible resumption of the respective resolutions at a forthcoming company meeting.
Multi-storey (MULT3)
Sales of Multiplan (MULT3) in its shopping centers amounted to 6.3 billion reais in the fourth quarter of 2022, which represents an increase of 12.9% compared to the same phase in 2021.
Looking at the same store base, October-December sales at Multiplan’s malls were 11.8% higher, the company said in the statement.
(With Estadão, Reuters and Agência Brasil)
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