U.S. futures and European markets operate lower, in the same direction as Asian markets closed on Thursday (1), with investors dealing with fears of tighter monetary policies and an imminent economic slowdown, which led to much of these markets to end August in the red.
Yesterday (31), the chairman of the Federal Reserve of Cleveland, Loretta Mester, said it is too early to conclude that US inflation has already peaked, noting that the Fed has more work ahead to control prices. She expects interest rates to rise above 4% before the Fed can start to pull back.
Contributing to the negative market movement was the announcement of a new lockdown in China, this time in the city of Chengdu, with 16 million inhabitants.
In China, another negative data also came out this Thursday, with the Caixin Industrial Purchasing Managers’ Index (PMI) contracting from 50.4 in July to 49.5 in August. Eurozone manufacturing activity also fell in August, according to a final PMI reading from S&P Global.
On the other hand, UK manufacturing activity beat estimates, according to S&P Global Manufacturing PMI.
In Brazil, attention is turned to the disclosure of the Gross Domestic Product (GDP) for the second quarter. The Refinitiv consensus predicts growth of 0.9%. In addition to GDP, the local agenda includes the release of the industry PMI and trade balance data.
On the corporate side, the pricing of the subsequent IRB share offering (IRBR3) will take place today. The offering will consist of the primary public distribution of, initially, 597,014,925 new shares, with restricted placement efforts, to be carried out in Brazil, with placement efforts abroad.
Check out more highlights:
1. World Scholarships
US futures traded lower this morning, after ending August in negative territory, on concerns about an economic slowdown alongside an interest rate hike to contain the country’s rising prices. Next Friday (2), the August labor market data will be released, which may give more signals for the Fed to determine the interest rate path.
See the performance of futures markets:
- Dow Jones Future (USA), -0.69%
- S&P 500 Futures (US), -0.89%
- Nasdaq Future (USA), -1.31%
Asian markets closed in the red after China’s factory activity extended declines in August due to new Covid infections, the worst heat wave in decades and a struggling housing sector that weighed on output, suggesting the economy will struggle to keep up. the impetus.
China’s Caixin/Markit Manufacturing Purchasing Managers’ Index for August, released on Thursday, showed that the sector is entering contraction this month. The industrial PMI/Caixin dropped from 50.4 in July to 49.5 in August.
The city of Chengdu, in southwest China and with about 16 million inhabitants, began a confinement on Thursday to try to contain a new outbreak of covid-19, which also scared the markets.
- Shanghai SE (China), -0.54%
- Nikkei (Japan), -1.53%
- Hang Seng Index (Hong Kong), -1.79%
- Kospi (South Korea), -2.28%
European markets also operate lower after a negative August and with contraction in eurozone manufacturing activity.
The PMI slipped to 49.6 in August from 49.8 in July and was below an initial reading of 49.7. The eurozone faces a cost-of-living crisis fueled by rising food and energy bills, which are increasingly forcing consumers to cut back on spending.
The UK manufacturing PMI offered reached 47.3 against a consensus of 46.0. Despite beating expectations, the reading still represents the worst month for British factories since May 2020.
- FTSE 100 (UK), -1.60%
- DAX (Germany), -1.67%
- CAC 40 (France), -1.47%
- FTSE MIB (Italy), -1.45%
Both WTI and Brent oil contracts were lower in the first trading session of September, impacted by increased supply and concerns that the global economy could slow further with new restrictions to contain Covid-19 in China.
Iron ore prices fell again in today’s session, affected by the contraction of the Asian giant’s manufacturing activity in August.
- WTI Oil, -2.42% at $87.38 a barrel
- Brent crude, -2.44% at $93.31 a barrel
- Iron ore traded on the Dalian Exchange was down 1.17% to 675.50 yuan, equivalent to US$97.99.
- Bitcoin, -1.40% to $19,942.71 (from 24 hours ago)
Brazil’s Gross Domestic Product (GDP) for the second quarter will be released at 9 am (Brasilia time). The GDP Monitor, from Fundação Getúlio Vargas, points to a quarterly expansion of 1.1% of the Brazilian GDP between April and June this year. already the consensus Refinitiv forecasts a slightly more moderate growth of 0.9%.
In the US, data on weekly unemployment insurance claims are released. The Refinitiv consensus points to 249,000 requests.
8:00 am: weekly IPC-S
9 am: Q2 GDP, with Refinitiv consensus up 0.9% from Q1 and up 2.8% year-on-year
9:30 am: Roberto Campos Neto, president of the BC, participates in a meeting of the Financial Stability Committee of the Central Bank (Comef) (closed to the press)
10:00 am: Paulo Guedes, Minister of Economy, participates in the 10th Entrepreneur Fair – SEBRAE (closed to the press)
10 am: PMI Industrial
12:30 pm: Campos Neto has a meeting with Moisés Gomes, Superintendent of Sebrae (closed to the press)
3pm: Trade balance
15:30: Guedes participates in the Instituto Unidos Brasil Forum
5:00 pm: Pricing of the IRB share offering
6:30 pm: Datafolha electoral poll
9:30 am: Claims for weekly unemployment benefits, Refinitiv consensus points to 249,000 claims
9:30 am: Productivity of the non-agricultural sector
10:45 am: PMI industrial
11:00 am: Construction expenses
11am: PMI ISM Industrial
11am: ISM manufacturing job
3. Minimum wage without real gain
The federal government sent to the National Congress, this Wednesday (31), the Annual Budget Law Project (PLOA) for 2023. The text, which still needs to be analyzed by parliamentarians, provides for a minimum wage of R$ 1,302.00 for the next year.
The amount corresponds to an increase of BRL 90.00 in relation to the amount practiced in 2022 (BRL 1,212.00), but only covers the effects of expected inflation in the period – therefore, without a real increase for the fourth consecutive year.
The estimated level for the minimum wage considers an accumulated high projection of 7.41% for the National Consumer Price Index (INPC), according to the last grid of parameters released by the Ministry of Economy in early July.
Budget for 2023 foresees a primary deficit of BRL 63.7 billion
A slight upward revision of revenue estimates for next year made the economic team lower the primary deficit estimate for 2023. According to next year’s budget project, sent to Congress on Wednesday (31), the negative result target it will correspond to R$ 63.7 billion for the Central Government – composed of the National Treasury, the Social Security and the Central Bank.
The deficit will be slightly smaller than that stipulated by the Budget Guidelines Law (LDO) of 2022, enacted last week. The LDO sets a target of R$ 65.9 billion for the next year.
Increase in the billing limit for Simples Nacional
The Constitution and Justice Commission (CCJ) of the Chamber of Deputies approved this Wednesday (31) the proposal that increases the ceiling for the Simples Nacional and the Individual Microentrepreneur (MEI). The new values take into account the official inflation (IPCA) accumulated from December 2006 to March 2022.
The proposal also allows for the hiring of up to two employees by MEI. Currently, the permission is for only one.
The new values will be effective from 2023 and will be updated annually for inflation. The project still needs to be analyzed by the Chamber plenary.
Last Wednesday (31), Brazil recorded 115 deaths and 61,085 cases of covid-19 in 24 hours, according to information from the consortium of press vehicles, at 8 pm.
The moving average of deaths from Covid in 7 days in Brazil stood at 128, a reduction of 28% compared to the level of 14 days before.
The moving average of new cases in seven days was 20,838, which represents an increase of 18% compared to the level of 14 days before.
The number of people fully immunized against Covid in Brazil reached 170,132,261, equivalent to 79.19% of the population.
The number of people who took at least the first dose of vaccines reached 180,774,755 people, which represents 84.15% of the population.
The booster dose was given to 102,524,180 people, or 47.72% of the population.
5. Corporate Radar
Itaú Unibanco (ITUB4)
The Board of Directors of Itaú Unibanco Holding (ITUB4) approved a proposal for an intra-group corporate reorganization, aiming at the partial spin-off of Banco Itaucard, a wholly-owned subsidiary of Itaú Unibanco, and the merger of the spun-off portion into the company.
Some of the activities currently carried out by Itaucard will be transferred to Itaú Unibanco, including the issuance and administration of credit cards, the establishment and management of payment arrangements and the execution of customer loyalty programs, as well as financing operations of motor vehicles, machinery and equipment and activities related to the mobility sector.
The activity of offering and maintaining payment accounts, financial investments, bonds and securities, including derivatives, among certain other credits and assets, will remain in Itaucard.
Ambipar (AMBP3) approved the 4th issue of simple debentures, characterized as Sustainable Debentures, not convertible into shares, with restricted distribution efforts, in the amount of R$ 1 billion.
Telefonica Brasil (VIVT3)
Telefônica Brasil informed that the unit values per share referring to Interest on Own Capital (JCP) resolved by the Board of Directors on August 19, 2022 were changed, considering that the acquisition of shares issued by itself to be held in treasury within the scope of of the company’s share buyback program.
The gross value per share went from R$0.17961450011 to 0.17975006784. Payment of this benefit will be made until July 31, 2023, the date being defined by the company’s board of directors.
(With Estadão, Reuters and Agência Brasil)
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