By Daniel Christian Henrique
Scenes of tractors blocking highways in several European countries became routine in the news during January and February. The target countries are Italy, Spain, Romania, Poland, Greece, Germany, Portugal and the Netherlands, for now. The main reasons are (with other additional points for each country): 1 - increase in production costs (energy, fertilizers and transport) after the start of the war between Russia and Ukraine; 2 - pressure from governments to reduce food prices in the face of inflation; 3 - dissatisfaction with cheap foreign imports, mainly from Ukraine, which had its quotas eliminated by the EU after the Russian invasion of its territory - but the fear of competing directly with Brazil's agricultural giant is always on the agenda as well, eliminating potential Mercosur agreements with the European Union;; 4 - climate changes that increased fires and droughts, directly affecting crops; 5 - European Union environmental standards (Canal Rural, CNN Brasil (a)).
On the "super-Wednesday" (when Bacen and Fed release the basic interest rates of the economies of their respective countries on the same day) of January 31, the Copom (from Bacen) continued to lower the Selic Rate, regressing by another 0 .5 p.p., ending at 11.25% p.a. The minutes indicate new future lows. The Fomc (of the Fed), in turn, also continued what it had already decided in recent meetings: the rate will remain the same, oscillating within the band of 5.25% to 5.50% (InfoMoney (a), Infomoney (b), Band (a)).
IPCA and IPCA-15
The IPCA ended January with an increase of 0.42%, driven by price increases in the food and beverage segment. A strong highlight is the price of potatoes, which increased by 26% due to heavy rains, reducing production and increasing prices in consumers' pockets. The transport segment, which had been experiencing repeated increases (mainly due to the high prices of air tickets), in turn, recorded a decline in the month (IBGE, Financial Intelligence, Band (b)).
In February, while the official percentage is not released, let's preview: the IPCA-15. In the projection, inflation will rise slightly more, estimated at 0.78% (IBGE, Financial Intelligence). The highlights for the biggest increase are the Education, Food and Beverage and Health and personal care segments (Agência IBGE Notícias).
And this increase in food prices, of course, was reflected in the prices of basic food baskets. January was almost unanimous: the basket increased in 16 of the 17 capitals, with emphasis on Belo Horizonte (10.43%), Rio de Janeiro (7.20%), Brasília (6.27%) and Goiânia (6.18 %). February saw an increase in prices in baskets in 14 capitals, with emphasis on Rio de Janeiro (5.18%), São Paulo (1.89%) and Salvador (1.86%) (DIEESE(a), DIEESE( B)).
Americanas' balance sheet for the first nine months of 2023 was released only on February 26th and presented to the CVM: the net loss was R$4.6 billion. On the same day, the judicial recovery plan was approved. In these plans, the objective is to return to profit only in 2025 (UOL Economia).
Still on the subject of finances in the red, in January the market was surprised by the request for judicial recovery from the aviation company Gol, but made in the USA using the Chapter 11 appeal, with the aim of reorganizing its finances. Subsequently, the shares already took a big hit (reaching 35%), as they had to be excluded from the B3 indexes, according to the rules of the exchange itself. It is worth remembering that other large airlines have already done the same and are still operating and in financial health today: Latam and Avianca Colombiana (Exame Invest, Forbes, Money Times (a)).
And there is an American airline "skidding" there too: Boing. After the loss of a door in mid-flight on one of its most current lines, at the beginning of January, the company's shares fell sharply and have not yet recovered. At the end of February, the head of the segment could no longer take the pressure and handed over the position. This all happened practically after releasing its 2023 results announcing record new orders, revenue of US$78 billion and net loss of US$2 billion - but much smaller than the US$5 billion in 2022 (Investing.com (a) , Investing.com (b), Mercado & Eventos). The airline sector is not forgiving... Incidents or accidents involving large aircraft can put companies in check for a long time.
Yes... the still high interest rates around the world are managing to co-opt even high-risk people. According to monitoring of the venture capital market carried out by Distrito released in January, in 2023 there was a 56.8% drop in investments in startups compared to 2022. Latin America follows the same trend: it saw a 46.8% reduction in the number of rounds comparing the two years, the lowest number since 2017 (E-Investidor (a)).
The sea was not full of fish in January, just for startups, no. The Ibov, which had been recording its biggest increases since November and December, including breaking its scoring record, reversed everything in January. The month closed with a drop of 4.79%, the most significant drop for the month since 2016. The first, most obvious explanation is the profit-taking of people who "dropped" on the Bovespa in previous months, especially foreigners. Added to the rise in US Treasury Bonds this month, it was time to say "bye-bye" to the foreigners. Momentarily, of course. Another important factor was the announcement of a primary deficit of R$230 billion in 2023 - the second highest in its historical series (E-Investidor (b)).
When February arrived, many local shareholders took advantage of the decline in B3 to buy while foreigners continued to leave the stock exchange. Thus, the Ibov reached 131,000 points during the month, but closed at 129,020 points (Money Times (b)).
After numerous clashes between the legislative and executive powers at the end of last year, both sides initially seemed to give in. Like this? The government agreed to discuss the matter via a Bill, sent on an urgent basis and which does not have immediate effect, unlike the Provisional Measure (previously launched on the last working day of the year and already annulled). The legislature, in turn, agreed to discuss the matter again, even after a year of processing and completion, in 2023 (TV Senado, Jornal da Recorde, Agência Brasil).
While even the term "post-pandemic" is beginning to disappear, the health plan segment continues to be heavily embedded in it, as it still suffers severely from the increase in claims among its customers after the pandemic period, when they began to catch up on their exams. (and they never stopped). Result: readjustments to plans exploded even more from September 2022, as announced this January by the National Health Agency (Brazil Journal). GPFA has already carried out an extension study on the topic, CLICK HERE TO READ.
And the financial G20 meeting held in São Paulo at the end of February ended without a final statement. The main reason is not difficult to deduce: the lack of consensus among the countries that make up the group on the wars in Ukraine and the Gaza Strip (CNN Brasil (b)).
References: Agência IBGE Notícias, Agência Brasil, Band (a), Band (b), Brazil Journal, Canal Rural, CNN Brasil (a), CNN Brasil (b), DIEESE(a), DIEESE (b), Exame Invest, E-Investidor (a), E-Investidor (b), Forbes, IBGE, Infomoney (a), Infomoney (b), Inteligência Financeira, Investing.com (a), Investing.com (b), Jornal da Record, Mercado & Eventos, Money Times(a), Money Times (b), TV Senado, UOL Economia.