Ibovespa closes down with Ômicron and PEC from Precatório; dollar rises

The domestic market operated on Tuesday (30) with new uncertainties about the Ômicron variant of Covid-19, and also with agitated news on Brazilian politics. The PEC dos Precatório was voted today in the CCJ (Committee on Constitution and Justice) of the Senate.

Global stock exchanges, which engaged in a strong recovery yesterday after a hit on Friday, closed in negative terms with a speech by the CEO of Moderna about vaccines. The Ibovespa ended the day with a drop of 0.87%, to 101,915.45 points – the lowest level since November 6, 2020 (100,925.11 points) -, after having reached around 100,000 points this afternoon.

At the same time, the dollar ended the session with a high of 0.45%, quoted at R$ 5.636, after reaching a maximum since April, around 1:15 pm, when it reached R$ 5.683.

See the main highlights of the last trading session of the month:

biggest highs

• CCR (CCRO3) + 6.95%
• Yduqs (YDUQ3) +4,35%
• Banco do Brasil (BBAS3) +3.34%
• Cogna (COGN3) +2,90%
• IRB Brasil (IRBR3) +2,86%

biggest casualties

• Locaweb (LWSA3) -10.09%
• Meliuz (CASH3) -9.12%
• CVC (CVCB3) -6,39%
• Iguatemi (IGTI11) -4.43%
• Banco Pan (BPAN4) -4.41%

Dollar

One of the main points for the rise of the US currency was the speech of the chairman of the Federal Reserve (Fed, US central bank), Jerome Powell, on Tuesday.

“Overall, the higher prices we see are related to imbalances between supply and demand that can be directly attributed to the pandemic and the reopening of the economy,” Powell said during a hearing before the US Senate Banking Committee. “But it’s also the case that price increases have spread much more widely… and I think the risk of higher inflation has increased.”

“[Mas] no one is happy when inflation is 4% or 5%, when our target is 2%,” said Fed Vice Chair Richard Clarida during a conversation with Cleveland Fed President Loretta Mester.

The day before, the US currency in sight was up 0.27%, at R$ 5.611 on sale. In 2021, the price jumped 8.58%.

Ômicron and vaccines

“I think there is no world where efficiency is on the same level as we had with Delta,” Moderna’s chief executive, Stéphane Bancel, told the Financial Times in an interview. “I believe there will be a fall. I just don’t know how much, because we have to wait for the data. But all the scientists I’ve talked to are like ‘this isn’t going to be good.’

The CEO also stated that the development of a specific vaccine for Ômicron could take months. The talk has heightened risk aversion and is setting the tone in markets on Tuesday.

Analysts are divided between those who think the variant will lead to a new wave of lockdowns and the more optimistic. Roberto Attuch Jr of Ohm Research said his baseline scenario is that Covid-19 is transitioning to becoming endemic.

He and other analysts have been drawing a parallel with the Spanish flu: when mutations took place and the virus became more contagious but less lethal, which led to the end of the pandemic. But he himself points out that for now everything is a guess.

Anvisa (National Health Surveillance Agency) reported on Tuesday that a Brazilian who recently returned from South Africa and his wife had preliminarily positive laboratory results for the new Ômicron variant of the coronavirus.

According to the agency, the samples will be sent for confirmatory laboratory analysis by Instituto Adolfo Lutz.

Precatório Pec

The CCJ of the Senate approved this Tuesday (30), by 16 votes to 10, the PEC dos Precatórios, which makes room in the 2022 Public Budget. Now, the text goes to the House’s plenary.

14 favorable votes were needed for approval by the Commission. The next step is to receive the approval of three-fifths of the lawmakers, in two rounds.

The main change accepted by senator Fernando Bezerra Coelho (MDB-PE), government leader and rapporteur of the PEC dos Precatórios in the Senate, was the removal of the Fundef (Fund for the Maintenance and Development of Elementary Education and the Valorization of Teaching) from the ceiling of spending — constitutional limit on annual government spending.

These judicial debts with the states amount to around R$16 billion. Under the PEC, 40% of this amount will have to be paid in the first year.

Last week, the rapporteur had already promoted some changes in the opinion, with the intention of alleviating resistance. The changes include the definition of Auxílio Brasil of BRL 400 as a permanent social program, and the linking of the fiscal space to be opened with the proposal – more than BRL 100 billion reais – to expenses with the new social program, social security expenses and constitutional minimums for education and health, among other points.

Bezerra also signed a commitment that the National Congress can monitor the payment of court orders.

Data of the day

It is noteworthy that this morning, employment data from the IBGE, the National Household Sample Survey (PNAD) were released. The unemployment rate dropped from 13.2% in the quarter ended in August to 12.6% in the third quarter.

At the same time, Brazil created 253,083 new formal jobs in October 2021. In 2021, the balance is 2,645,974 new formal jobs, according to data from Caged (General Register of Employed and Unemployed), released by the Ministry of Labor and Social Security this Tuesday (30).

*With information from Reuters and Ligia Tuon, from CNN Brasil Business