Finance & Market Bulletin - September 2022

13 Oct

13Oct

By Daniel Christian Henrique

B3: Volume Drops but Individual Increases

Compared to September last year, the volume of trading on B3 (B3SA3) decreased by 15.1%. The number of individuals on the stock exchange, on the other hand, increased in the same period by 36.5% (FINANCE NEWS, 2022; SPACEMONEY, 2022). Ibov reduces august's strong gain, but remains positive with a 0.47% rise. The main villain was the new rise in U.S. interest rates, generating much repercussion in world markets (EXAME INVEST, 2022).

GDP advances

In September, GDP growth was reported for the second quarter of the year, increasing 1.2% compared to the first. Taking as comparison the second quarter of 2021: (1) there was an increase of 3.2%; (2) in the investment rate, it was 18.7%, almost equal to 2021 (IPEA, 2022; AGÊNCIA IBGE DE NOTÍCIAS, 2022).

Deflation for the third month in a row

September came to add for the third time in a row in the year the fall in the IPCA index - Broad Consumer Price Index, now with -0.29%. Consequently, the accumulated year also decreases, regressing to 7.17%. Responsible? Again the drop in fuel prices (reduction of 8.5%) and electricity, mainly. Nothing related to the most drastic reductions in the other sectors that make up the index. However, it is worth mentioning the slight fall in the food sector again this month (-0.51%), mainly driven by the 13.71% drop in milk prices (EXAME, 2022a, 2022b).

But... food and beverage sector at double inflation

The fall in the IPCA, however, does not greatly mitigate the situation of the food and beverage sector, which accumulates in 12 months (until September) a high of 12%, rounding (PODER360, 2022) - almost beating double inflation in 12 months, which reached 7.17% in the same period (IBGE, 20.22). Observing in isolation the price of bread, the most basic food of the population, the accumulated one year closes in even worse situation: with more than double inflation in 12 months, registering about 17% high. The bakery sector in general was also very damaged, with an average increase of 18%, with 18% (GAZETAWEB, 2022).

Food parcel costs fall for second consecutive month

The slight drop in the food sector in the IPCA compound had repercussions on the costs of the food parcel. Compared to July, the reduction was 9.9% in two months, ending September at R$ 326.96. However, this time the reduction was in 12 of the 17 capitals (in August there were 16 capitals). The data are from the Interunion Department of Statistics and Socioeconomic Studies - DIEESE. However, in the accumulated year 2022, there is still an increase in the values of basic baskets in all capitals. The most expensive baskets for the month of September were São Paulo (R$ 750.74), Florianópolis (R$ 746.55) and Porto Alegre (R$ 743.94) (AGÊNCIA BRASIL, 2022).

Eurozone inflation hits record high

If inflation in Brazil is falling, the same cannot be said in Europe... The accumulated inflation in the euro zone in a year to September reached 10%, a record for the series, which was already on record high in August - when it totaled 9.1%. In the previous year, in the same month, inflation was recorded at 3%. The accumulated in the year was still higher, equal to 10.1% (INFOMONEY, 2022b)

New interest rate hike in Europe and the United States

The ECB (European Central Bank) in a new attempt to attack record inflation in Europe, attacks on the front more used and known in tupiniquins territories by bacen: raising once again its basic interest rate of the economy by 0.75 p.p. The bank still raised refinancing rates to 1.25%. With the new deals, analysts project an annual interest rate at 9.1%. The ECB has already made promises of further rises if inflation does not behave (MONEY TIMES, 2022; INFOMONEY, 2022c). The Federal Reserve (FED) in the United States, in turn, tracks attempts to contain its domestic inflation, raising its base rate for the fifth time in a row. This September, the Fomc (Federal Open Market Committee) increased its base rate by another 0.75 p.p. To make matters worse, the committee already estimates new increases by the end of the year, which may reach interest of 4% in the accumulated (SUNO, 2022).

Euro still below parity

In September the Euro maintained its continued value below parity with the Dollar, beating a new record for the last 20 years (surpassing August), reaching US$0.97 during the month. With the new increases in the U.S. basic interest rate by the EDF, analysts point the euro below parity until early 2023 at least (SEU DINHEIRO, 2022; DINHEIRO VIVO, 2022).

Beef and chicken exports continue to grow

After the third quarter of the year, there is great excitement from beef and chicken producers. Motive? The continued increase in exports of these commodities, leading to expectations of record falls in exports, surpassing the year 2021. Between January and September, the country exported 1.39 million tons of beef and 3.36 million tons of chicken meat (CANAL RURAL, 2022). According to the report of the United States Department of Agriculture (USDA) in Brasilia (DF), chicken exports are expected to end 2022 with about 4.7 million tons in exports. In the same report also highlighted the reversal of expectations of export losses to China of beef by 3% to increase by 1% (INFOMONEY, 2022a; AVISITE, 2022).

Financing of vehicles on the rise

September was the month with the highest average vehicle financing (light, motorcycle and heavy) per business day of 2022, recording 22,400 vehicles daily. In comparison with September 2021, there was a retraction of 5.9% (B3, 2022). Despite the highest average of the year in September, strong price hikes in zeros with inflationary corrections have made it impossible for the industry to increase sales.

Tourism recovery and expectations for 2023

In September, the Sebrae Report was released in partnership with FGV, which points to the recovery of the tourism sector, which has been severely damaged in the last two years by the Covid-19 pandemic. Reasons: pent-up demand for the pandemic and prioritization of national travel due to the high dollar and the war in Ukraine. The expectations are that in the second half of 2023, if nothing worsens in sanitary conditions and global conflicts, the tourism sector will overcome the pre-pandemic period (AGÊNCIA SEBRAE DE NOTÍCIAS, 2022).

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Also during this month of October and November, we will make new updates of the news related to the economy and finances linked to the month of SEPTEMBER, as new publications are published by research institutes, consultancies, associations and financial news. Follow.