Ibovespa closes under pressure from Wall St and WEG falls Reuters

© Reuters. Electronic panel at B3 in Sao Paulo REUTERS/Amanda Perobelli

Paula Arend Layer

SÃO PAULO (Reuters) – The stock market closed this Wednesday under pressure from a negative trajectory on Wall Street and rising U.S. Treasury yields, while WEG fell 10% after third-quarter earnings came in lower than expected.

The basic index of the Brazilian stock market Ibovespa fell by 0.82% to 112,829.97 points. At the maximum of the day, it reached 114318.65 points. The minimum is 112,680.27 points. The financial volume was 19.8 billion reais.

Wall Street, one of the benchmarks of the North American stock market, fell 1.43%, also on the back of corporate results, while the yield on the 10-year US Treasury rose to 4.957%.

Against the background of the markets, caution remains with the geopolitical situation and uncertainty with the next movements of monetary policy in the United States.

Investors await the Federal Reserve’s interest rate decision next week, with related US price data on Friday on their radar, and continue to watch the conflict between Israel and Hamas, with no signs of abating.

Israeli Prime Minister Benjamin Netanyahu said the country was preparing a ground invasion of Gaza, but gave no details on the timing or other information about the operation.

“In addition to this complex issue abroad, the tax remains a focus for local investors,” added analyst Luis Novaes of Terra Investimentos.

He said greater government agility is expected to boost revenues and signal that the 2024 fiscal target will be met, but recent events have shown congressional resistance to some programs, which has had a positive impact on revenues.

“This makes the fiscal outlook more uncertain given that the government has not shown any willingness to cut spending,” he added.

The opinion on tax reform, presented this Wednesday, expanded the budget allocated to the regional government and included a regime that favors self-employed professionals, which could increase the overall rate of the new consumption tax.


– WEG ON (BVMF: ) fell 10.11% to 31.47 reais, ending at an intraday low and the lowest price in about a year, even after third-quarter net income increased to 1.31 billion reais as revenue expansion was below analysts’ expectations. For analysts at Goldman Sachs (NYSE 🙂 , the balance sheet confirms their expectations for a slowdown in second-half revenue, although it fell at a higher-than-expected quarter. “On tomorrow’s conference call, we will try to better understand what management’s outlook is for future revenue growth and margin trends,” they said.

– GPA (BVMF:) ON fell 6.02% to 3.28 reais after rival Carrefour Brasil reported a 3.9% year-on-year decline in third-quarter gross sales the day before 28.2 billion reais with same-store sales. decreased by 3.7%. CARREFOUR BRASIL ON (BVMF: ) closed up 2.16% at 8.62 reais.

– CASAS BAHIA ON fell 5.88% to 0.48 reais after the retailer’s board of directors on Tuesday approved a 25-to-1 reverse stock split proposal and an extraordinary general meeting to discuss the issue on November 16. In the sector, MAGAZINE LUIZA ON (BVMF 🙂 closed up 2.13% at 1.44 reais, reversing a session-long drop of 7.8% at its worst when the stock traded at 1.3 reais.

– GOL PN rose 1.60% to 7.60 reais, ahead of the release of quarterly balance sheets scheduled for the opening of the Brazilian stock exchange on Thursday. Last week, the airline estimated a loss per share of 0.70 reais for the third quarter of this year. In October, shares of Gol (BVMF:) rose by almost 15%. In the sector, AZUL PN (BVMF:) fell 2.65% to 12.85 reais.

– NATURA&CO ON fell 5.06% to 12.75 reais amid a report from JPMorgan (NYSE: ), which cuts its price target on the stock from 25 to 19 reais but maintains an “overweight” recommendation. In the report, they mention that noise levels around the results are expected to remain high, given the structural changes being implemented at Avon, which are expected to reduce sales, despite an increase in margins and earnings per share. The cosmetics manufacturer publishes its third quarter balance sheet on November 14.

– SANTANDER BRASIL UNIT (BVMF: ) lost 1.75% to 26.99 reais, after rising to 28.44 reais at the opening peak, amid the fallout from its third-quarter balance sheet, which showed a drop in defaults on a quarterly basis, but a decline gross financial margin. Citi analysts said the bank’s focus on adjusting its risk profile at origination is starting to pay off, particularly in asset quality trends. But they felt pressure on financial margins continued. The general director of the bank said that the institution is still focused on profitability and is not “racing for customers”.

– ITAÚ UNIBANCO PN (BVMF: ) ended up 0.19% to 27.04 reais, while BRADESCO PN (BVMF: ) fell 0.28% to 14.14 reais. Itaú reports its results on November 6, after the market closes. Bradesco makes the announcement on November 9th, also late in the day.

– VALE ON (BVMF: ) fell 0.09% to 63.93 reais, succumbing to negative pressure from abroad after rising to 65.18 reais at its best, even as futures hit five-week highs this Wednesday – a fair in China, supported by the country’s additional measures to stimulate economic growth. The most traded commodity contract on the Dalyan Commodity Exchange ended the day’s trading with an increase of 3.3%. Vale also reports its balance sheet on Thursday, after the market closes.

PETROBRAS PN (BVMF: ) advanced 0.53% to 36.07 reais, holding on for a recovery after Monday’s sharp fall (-6.6%) amid concerns about the company’s dividend and governance. Shares reacted earlier, closing up 1.5% after the company’s chief financial officer told Reuters that the company’s proposal to create a capital reserve, approved by the board of directors and announced on Monday, was aimed at guaranteeing resources solely to pay dividends. On the foreign market, the barrel grew by 2.34%.

– XP (BVMF:) INC, traded in New York, fell 3.98% to $20.04 after publishing an interim view showing net inflows of 48 billion reais, but most (34 billion reais) from the inclusion of clients Modal. That meant an organic flow of “negligible” 14 billion reais, Citi analysts wrote in a note to clients. JPMorgan analysts also said XP reported “weak” numbers for the third quarter. The group publishes its full results on November 13.

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