By Andre Romani
SAO PAULO (Reuters) – The main index of the Brazilian stock market ended this Friday with a timid retreat, in a trading session that alternated high and low, and with the market evaluating the impact of robust employment data on the United States’ monetary policy.
Petrobras and Bradesco were high highlights, after publishing results the day before. Vale and B3 pressured the index.
The Ibovespa dropped 0.16%, to 105,134.73 points, which represents a drop of 2.5% in the week, the fifth consecutive weekly low. The last time the index had such a long sequence of declines was from September to October 2020 and longer than that only between May and June 2018. The financial volume of the session was 31.7 billion reais.
The focus of the day was the opening of 428,000 jobs in the US outside the agricultural sector in April, above market expectations. There was a slight downward revision in the March index and the unemployment rate was stable.
The data, which show a robust US labor market, are key in defining the next steps for monetary policy in the country, amid the increase in interest rates by the Federal Reserve (Fed), the US central bank, to contain inflation. .
The indicator gains even more prominence to come after the Fed raised interest rates by 0.5 percentage point on Wednesday, with its chairman, Jerome Powell, ruling out a 0.75 point hike for now. Still, traders are pricing the yield curve in the majority chance of a 0.75 point increase at the next meeting.
“The Fed will continue to say what the market wants to hear, but do what needs to be done,” says João Guilherme Penteado, chief strategist at Apollo Investimentos.
For him, the drop in the stock markets this Friday is more linked to a general global context, which includes the acceleration of interest rates in the US and capital outflow from the stock exchanges, than to the employment data specifically.
“There will be a series of more negative and positive data, but all based on a challenging scenario”, he says, noting that last week data indicated an unexpected retraction of the US Gross Domestic Product (GDP) in the first quarter.
On Wall Street, the main stock indexes fell between 0.3% and 1.4%, also in a volatile session.
HIGHLIGHTS
– PETROBRAS PN rose 3.3%, with oil rising and after the state-owned company’s net profit rose to 44.56 billion reais in the first quarter. The oil company also approved the distribution of dividends and its president said that the main vector of gains is the area of exploration and production.
– BRADESCO PN advanced 2.1% after the bank reported a 4.7% rise in recurring earnings from January to March, revised several projections and announced a share buyback program. The financial institution expects delinquency to stabilize in the second half of the year. Shares of other banks also appreciated.
– PETZ ON plunged 12.7%, the biggest drop since it was listed on the stock exchange, on a negative day for companies in the retail sector and after results from the animal products and services company.
– ECORODOVIAS ON dropped 6.1%, after the profit of the infrastructure concessions administrator fell 81.2% from January to March, due to higher costs and a drop in gross revenue due to the end of some concession contracts.
– ALPARGATAS PN soared 7.4%, the highest since August, after its Havaianas brand posted record net revenue for a first quarter.
– LOJAS RENNER ON advanced 6%. The retailer had a first-quarter net profit that reversed a loss in the same period last year and reported that sales in April and May are above expectations.
– VALE ON lost 0.7%, sixth consecutive decline, and steel mills closed with no common direction, following a drop of more than 5% in iron ore in Asia with concern over the Covid-19 situation in China.
– NATURA ON extended its recent negative performance and fell by 4.6%, after announcing a larger-than-expected loss by the market and postponing some financial projections.
– CARREFOUR BRASIL ON fell by 7%, after the adjusted net income of the owner of Atacadão remained practically stable in the first quarter. Company executives said same-store food retail sales rose sharply in April.
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