Finance & Market Bulletin - May 2022

09 Jun

09Jun

By Daniel Christian Henrique

Agribusiness Confidence Improves in May

According to analysis by Fiesp (2022), there was an improvement in the Agribusiness Confidence Index now released in May, referring to the first quarter (January to March). The index reached 111.5 points, equivalent to 1.9 points higher than the value achieved in the previous quarter. Two points were highlighted: this improvement in confidence was mainly reflected in the "After Porteira" industries (referring to food manufacturers) and in the improvements in the evaluations of projections released (or equivalent to the reduction of pessimistic disclosures) about the national economy. In this index, scores above 100 points are considered optimistic (FIESP, 2022; CANAL RURAL, 2022) .

Diesel price hits record The month of May had its records too, not to be behind the other months of this year. Now it was the turn of Diesel, reached the value of R $ 6.94 near the middle of The Month of May in the gas stations. According to the ANP (National Agency of Petroleum, Natural Gas and Biofuels), this was the highest record recorded since the beginning of its historical series in 2004. The state of Acre was where it was the highest high, reaching an expressive R$8.30. It is worth noting that the price of diesel S10 was not considered (ISTO É DINHEIRO, 2022; CNN, 2022). After the month of May, it reached R$ 7.17 of average price of diesel in the stations, equivalent to 4.4% higher than the month of April. Compared to last year, there was a 53% price increase (MOTORSHOW, 2022; ISTO É DINHEIRO, 2022b).

The GPFA has conducted scientific reports regarding the constant increases in fuels, analyzing the integration between its prices, sales; exchange rates and a barrel of oil, in addition to the IPCA. Follow the posts already completed in the following links: PRICES X FUEL SALES THE INTERRELATIONSHIP BETWEEN FUEL SALES (CUBIC METER), OIL BARREL QUOTE, IPCA AND FOREIGN EXCHANGE

Gas canister exploding.... in the pocket

GLP cooking gas began its record-breaking price negotiations last month (April) when it committed 9.4% of the minimum wage. But the month of May managed to go much further by reaching the maximum price of R$ 160.00 (the highest since 2006) in a municipality of Santa Catarina and now commit no less than 13.2% of the average income of workers with minimum wage. The average, however, was slightly below the month of April (when the century record was reached), with a value of R$ 113.11. As a consequence, the number of people who are abandoning LPG gas for cooking and adopting firewood, has been increasing (PORTAL LITORAL SUL, 2022; UOL ECONOMIA, 2022)

Interest goes to 12.75% per year

Copom increased the rate from 11.75% p.a. to 12.75%, again driven mainly by inflationary pressure, driven by the new wave of the pandemic in the world, war in Ukraine and repricing of monetary policy in developed countries, generating greater volatility in underdeveloped countries (BCB, 2022). This rate is the highest hit in the last five years.

Ibov breathes, Bitcoin sinks

After a significant drop in April of 10% in the main index of B3, Ibov, follows in May with a growth of 3.32% in its gains, surpassing inflation and all other aspects of investments - accumulating in the year 6.23%, until May 31 (ISTO É DINHEIRO, 2022c). Despite the bad start at the beginning of the month, following the downward trajectory coming from April, Ibov recovers until the end of the month with the mainmete highs of the shares of companies of two segments: (1) metal commodities, with great weight in the index, pulled by the easing of the restrictions that the new wave of covid had imposed in China, and (2) the banking sector, pulled by the new high that Copom offered at the interest rate and already a new forecast of next 0.5% rise, attracting investors for migration to fixed income (DIÁRIO DO COMÉRCIO, 2022).

The worst performance was for Bitcoin, losing 15.7% in May and is half its value in six months, against a devaluation for nine weeks in a row (BBC NEWS, 2022).

IPCA finally slows down, but it's still high

May was the month that for the first time recorded inflation below 1%, limited to 0.47%, mainly derived from the 0.36 p.p. reduction in electricity. The pressure exerted by gasoline later this month influenced the rise of other products, not allowing an even greater reduction in inflation, which despite the low can still be considered high for a single month (INFOMONEY, 2022a, 2022b).

INCC-M rises 1.49%, along with the cost of construction triples

The National Construction Cost Index - M (INCC-M) achieved a cumulative year of 4.27% with a 1.49% change in May, higher than the increase in April when it reached 0.87% in April. Pertinent to the Labor index, it tripled, from 0.46% in April to 1.43% in May (FGV, 2022). The value of the cost of construction, in turn, advances 2.17% in the month, equivalent to 0.96 percentage point compared to April. The main motivations of this increase were collective agreements and high prices of construction materials (AGÊNCIA IBGE, 2022).

Investments in startups reduce 61% compared to May 2021

In total, the 40 rounds in May led to investments of $298.5 million, a 61% decline from may last year ($772.6 million). This reduction was mainly attributed to the scenario of high interest rates and global inflation, generating greater care of investors in new capital contributions (ECONOMIA SC, 2022).

Conab points to drop in prices at Supply Centers in May

Faced with the higher wholesale supply of lettuce, tomatoes, carrots and potatoes, prices were reduced in several Supply Centers, according to a survey of Conab's quotes. This drop movement directly reflected in supermarket prices in some states. The tomato, which traditionally is always one of the villains of inflation rates, maintained in May a trajectory of reversal of its highs, also driven by the highest supply in almost 15% in almost all states (CONAB, 2022).

Jobs grow, wages fall

The high levels of unemployment reached at the height of the pandemic were falling and marked a new positive level in the mobile quarter recorded by the PNAD Continuous IBGE. The unemployment rate in the months of March-April-May 2022 closed at 9.8%. The same mobile quarter of 2021 recorded values of 14.7%. Also observing these two mobile quarters, the average real income of workers (effectively received in the month) decreased from R$ 2,801.00 in 2021 to R$ 2,641.00 (IBGE, 2022).

Specifically for the month of May, the General Register of Employees and Unemployed (Caged) disclosed that Brazil created in this period exactly 277,018 vacancies of new formal jobs, much higher than the forecasts made by specialists in the segment (projected approximately 190,000 vacancies). By contrast, the average salary fell 0.94% in May (INFOMONEY, 2022c).

References:

AGÊNCIA IBGE. Preços da construção aceleram para 2,17% em maio (2022)

BCB. Banco Central do Brasil - Copom eleva a taxa Selic para 12,75% a.a. (2022).

BBC NEWS. Bitcoin perde metade do valor em 6 meses: estamos vivendo um ‘criptoinverno’? (2022)

CANAL RURAL. Confiança do agronegócio sobe no 1º trimestre, aponta Fiesp, (2022)

CNN BRASIL. Preço médio do óleo diesel chega a R$ 6,93 e atinge recorde, diz ANP (2022)

CONAB. BOLETIM PROHORT: Aumento da oferta favorece queda de preços das hortaliças, destaque para cenoura e batata (2022)

DIÁRIO DO COMÉRCIO. Ibovespa fecha maio em alta mas o cenário é de cautela (2022)

ECONOMIA SC. Investimentos em startups brasileiras caem 61% em maio (2022)

FGV. INCC-M: Índice Nacional de Custo da Construção sobe 1,49% em maio de (2022)

IBGE. PNAD Contínua - Pesquisa Nacional por Amostra de Domicílios Contínua (2022)

INFOMONEY. Inflação chegou ao pico? Após IPCA de maio desacelerar, analistas se dividem sobre próximos passos do Banco Central (2022a)