The price of a barrel of Brent oil has been on the rise since the start of the war in the Middle East at the beginning of October, mainly following fears of an expansion of the conflict (Bora Investir). The impact of this increase could reach the entire world. Added to the rise in commodities resulting from the war in Ukraine, more global inflation is expected, that is, a general increase in prices in all currencies around the world.
Until October 19th, then, what was expected occurred, with a consecutive increase in the Brent barrel, reaching the value of US$ 92.40. However, the price then began to drop, ending October 31 at US$85.20. Reasons for the setback: reduced fear of interruptions in oil supply due to the war in the Middle East and the increase in supply by OPEC and the USA. The WTI barrel closed at US$81.02 (Valor Econômico, CNN Brasil).
Speaking of inflation, between October 31st and November 1st another Copom meeting took place. And what was promised in previous meetings was fulfilled: another 0.5 pp cut in the Selic Rate, now reaching 12.25%. The expectation is for further reductions in the future, however, the BC is conditioned on maintaining fiscal targets to anchor inflation expectations (Infomoney (c)). Conflicts of information between government members in the last days of the month regarding whether or not to maintain the zero fiscal target stipulated in the fiscal framework led to new forecasts with an increase of 0.25 pp in the Selic for 2024 and 2025 - additionally considering the complex external scenario that it could get worse (Folha S. Paulo).
During the month everyone was focusing their attention on Petrobras in the face of the possible rise in Brent, but it normalized, just as other commodities were not affected in a possible cascade effect. Conclusion: Ibov went sideways and ended up falling at the end of the month in the face of debates in the government about changing the zero fiscal target to a deficit of 0.25% of GDP. The biggest appreciations in the period were: GOL PN, JBS ON, ULTRAPAR ON, CVC BRASIL ON, CSN MINERAÇÃO ON, TELEF BRASIL ON, SANTANDER BR UNIT, BRF SA ON, VIBRA ON, P.AÇUCAR - CBD ON (Valor Investe, Estado of S. Paulo (b)).
With the scare over Brent prices over, for now here in Brazil everything remains the same as in September. The inflation preview for the month of October, the IPCA-15, released on the 26th of the same month, closed at 0.21%, slightly lower than September. The main reasons were also the same as the previous month: pressure from the Transport segment, which was the biggest increase in the period (0.78%), pressured by the increase in the prices of airline tickets, transport via apps, registration plates and vehicle licensing. The sub-item in the segment with a drop was fuel: gasoline (-0.56%), ethanol (-0.27%) and vehicle gas (-0.27%) - with the exception of the increase in diesel (1.55 %). And the highlight in the decline was, once again, Food and Beverages (-0.31%) with emphasis - also again - on the Home Food subgroup, recording a drop of 0.52% (Agência IBGE Notícias (a)).
As for the IGP-M, it saw another increase in October, now 0.50%. The main reasons were the rise in commodities: cattle (from -10.11% to 6.97%); VHP sugar (from -2.70% to 12.88%) and beef (-4.55% to 3.85%). But in the year to date it is still down -4.46% and -4.57% in the last 12 months (FGV; FGV-Ibre).
If on the one hand commodities put pressure on inflation, on the other they contributed again to a new record surplus: exports from record grain harvests and increased oil production were essential for revenues, while the fall in oil prices and its derivatives after the initial scare of the war in the Middle East were responsible for the reduction in spending (Agência Brasil)
Data released this October by IBGE indicate that in August the services sector fell 0.9% compared to July, debunking the continued increase projections for this segment previously released by analysts. Guilty? The same analysts blame the still high interest rate, warning that the segment will move sideways until the end of the year - prediction! subject to errors (!) (O Estado de S. Paulo).
Information from FipZap released in October for the month of September reports an increase of 0.96% in rents, generating an accumulated increase of 13.26% for the year. The biggest increases, almost outliers, were Florianópolis and Goiânia, with 29.35% and 25.77% respectively (InfoMoney (a)).
Food parcel in decline
If rent rose, at least the food parcel fell in 14 capitals in September, according to the Dieese bulletin released in October - continuing the declines that have been accumulating since May, highlighted in the month by Brasília (-4.03%), Porto Alegre (-2.48%) and Campo Grande (-2.32%). In relation to the other capitals, the biggest increases were Vitória (3.18%), Natal (3.06%) and Florianópolis (0.50%) (Dieese). Therefore, Florianópolis has the biggest increases in rent and basic food baskets... and the summer season hasn't even arrived yet.
The blockade carried out on the assets of the company's partners 123 miles to compensate injured consumers increased from R$50 million to R$900 million. The amount stipulated by the court was based on the company's own information on debts with its unsecured debt holders (State of Minas).
With each passing month, what science already said is being confirmed: the weather will change... and for the worse... The heavy rains and floods in the south of the country this October have already amounted to R$ 1 billion resulting in losses for rural producers. On the opposite side of the country, in the north, the severe drought is already damaging the flow of corn (which has been breaking production records) and will end up affecting its price. The drought that has dried up rivers in the Amazon (leaving them at the lowest levels in history) has forced several companies in its industrial hub to give collective vacations to metalworkers due to the strong difficulty in transporting electronic products (Estado de Minas, Época Negócios , AM1)
Before the pandemic, distrust of teleworking was general, resulting in the lowest returns on the market. After the pandemic, the scenario was reversed. Research by IBGE's Pnad released on the 25th shows that in 2022 teleworkers received income 2.7 times higher compared to those who work in person (R$ 6,479.00 against R$ 2,398.00, respectively). The total number of people in this modality in the same year was 7.5 million workers (including the 9.5 million people who use remote work - the difference is those who do not use ICTs).
But stay calm at this time... The research also shows that the highest salaries linked to remote work are correlated to people with a higher level of education (70% of the total), companies within segments with higher incomes, as well as willing workers to bear the costs of working remotely from their homes - which is generally quite expensive (Agência IBGE Notícias (b); Isto É Dinheiro).
It wasn't this time (to the relief of some and some companies!). The Chamber of Deputies postponed the vote on the Bill (PL) that intends to extinguish Interest on Equity - which is one of the agendas for tax reform (Your Money). The thing is for everyone to continue making their accounts, CPFs and CNPJs.
Everyone could see that sports betting was expanding exponentially, as every popular website has some advertising for "Bets", just as they are constant on television programs. The Bill processed in the Chamber of Deputies this October (this one, without postponing!) establishes that cash can no longer be used; athletes, referees, managers and technical committees cannot be employees of the company; there will be a tax on 18% of the company's gross revenue, being: 2% for Social Security, 1.82% for the Ministry of Education, 6.63% for the sports area, 5% for the tourism area and 2.55 % for the National Public Security Fund (Exame).
Meanwhile... in the Federal Senate...
The payroll tax exemption implemented in 2012 for 17 relevant sectors of the national economy that have high levels of employability has been extended consecutively and was now due to expire in December. But at the end of October, the Federal Senate extended it until 2027 in order to maintain investments by companies by offering legal security. This extended Bill replaces the collection of 20% tax on payroll with rates of 1% up to 4.5% on gross revenue (Agência Senado; Agência CBIC).
It is no longer a surprise, the scheduled date for delivery of Americanas' 2022 financial statements has arrived (October 31st) and their release has been postponed, again (to November 13th). The company claims that new facts have been established in the ongoing investigations, requiring more time for independent auditors to investigate in order to now publish a quality statement with adequate accounting records (ADVFN).
Meanwhile... in other retail companies...
The Americanas case only worsened what was already bad, leading the retail sector to the biggest crisis in its history, resulting from: high levels of debt (generated pre-pandemic with the Selic at rock bottom), increased credit to customers in the pre-pandemic period, leading to an avalanche of defaults during the pandemic and, to this day, intense competition from major e-commerce players (Amazon, AliExpress, Shopee and Shein, for example), a higher risk premium abroad resulting from the Americanas case for operate with the sector and the expectation of a drop in interest rates (not so certain yet) to increase family consumption. Consequently, many investors are taking a closer look at the sector at the moment (Infomoney (b)). What a phase...
References: ADVFN, Agência Brasil, Agência CBIC, Agência Senado, Agência IBGE Notícias (a), Agência IBGE Notícias (b), AM1, Bora Investir, CNN Brasil, Dieese, Estado de Minas, Época Negócios, Exame, Folha S. Paulo, FGV, FGV Ibre, InfoMoney (a), Infomoney (b), Infomoney (c), Isto É Dinheiro, Estado de S. Paulo (a), O Estado de S. Paulo (b), Seu Dinheiro, Valor Econômico, Valor Investe.