Stocks fall sharply with Covid in China and expectations of high interest rates; oil and ore plummet and more market highlights today

New York and European stock futures fell, while Asian markets closed lower on Monday (25), on the prospect of weaker global growth, higher interest rates and COVID-19 lockdowns in China.

The world’s second-largest economy struggles to contain its worst outbreak of the virus despite tough lockdowns in its biggest city, Shanghai. Over the weekend, Beijing warned that the virus has been spreading undetected for about a week.

On Wall Street, investors are weighing up the likelihood of interest rate hikes as they prepare for what will be the busiest week yet in corporate earnings season. About 160 companies in the S&P 500 are due to report earnings this week, and all eyes will be on reports from major tech companies including Amazon, Apple, Alphabet, the parent company of Google, Meta Platforms and Microsoft.

Investors are also looking forward to a major inflation measure this week. The personal consumer spending index is due to be released Friday before the bell. In February, the PCE core jumped 5.4%.

It is worth mentioning that, last week, the Ibovespa closed down by 4.39%, only on Friday, it fell 2.86%, to 111,077.51 points, the lowest closing level since March 15th and the lowest daily low since November 26th. On Friday, the commercial dollar advanced 4%, trading at R$ 4.804 in the purchase and at R$ 4.805 in the sale, amid signs of a more expressive rise in interest rates in the US.

In Europe, Emmanuel Macron defeated his rival Marine Le Pen in Sunday’s election, securing a second term as president of France.

Meanwhile, oil prices open the week with a sharp drop on global growth concerns.

On the corporate side, we highlight Vale’s balance sheet, next Wednesday, after the market closes. On the same day, Petrobras will release operational previews for the first quarter. On Thursday, Oi will release the balance sheet still referring to the fourth quarter of 2021.

In indicators, consumer confidence and weekly IPC-S come out, with a Refinitiv consensus up 1.51%.

Check out the highlights:

1. World Scholarships

U.S

US futures fell this morning as investors weighed the likelihood of interest rate hikes. Since Thursday, risk aversion has been gaining traction in the market, after Federal Reserve Chairman Jerome Powell said that a 50 basis point rise is on the table for the next meeting of the Federal Open Market Committee (FOMC). , the acronym in English). In addition, on Friday, the president of the European Central Bank (ECB), Christine Lagarde, also said in an interview that “she sees a strong chance of an interest rate hike this year”.

Wall Street is also gearing up for a week full of corporate earnings, including reports from big tech companies like Amazon and Apple.

The market is still keeping an eye on Twitter, which is reportedly re-examining Elon Musk’s takeover bid after the billionaire investor disclosed he had raised $46.5 billion in funding, according to information from the Wall Street Journal, citing unnamed sources. .

See the performance of futures markets:

  • Dow Jones Future (USA), -1.06%
  • S&P 500 Futures (US), -1.12%
  • Nasdaq Future (USA), -1.01%

Asia

Asian markets closed lower as Chinese stocks tumbled sharply amid China’s government’s struggle to contain its worst outbreak of the virus despite tough lockdowns in its biggest city, Shanghai.

China, the world’s second-largest economy, is struggling to eradicate its worst Covid-19 outbreak in two years with severe lockdowns and mass testing, while maintaining its zero-covid policy that has hit the economy and morale. Shanghai, the country’s largest city, reported its first deaths on April 18, despite detecting thousands of cases daily in recent weeks.

  • Shanghai SE (China), -5.13%
  • Nikkei (Japan), -1.90%
  • Hang Seng Index (Hong Kong), -3.73%
  • Kospi (South Korea), -1.76%

Europe

European markets fall sharply as selling in global equity markets continues into the new trading week amid concerns over Covid-19 in China.

Investors in Europe are also digesting the results of Monday’s French presidential election and monitoring the latest developments in Ukraine.

The Russian invasion of the country entered its third month on Sunday. The conflict that killed thousands and led to the worst refugee crisis Europe has seen since World War II.

  • FTSE 100 (UK), -2.25%
  • DAX (Germany), -1.82%
  • CAC 40 (France), -2.34%
  • FTSE MIB (Italy), -2.14%

commodities

Oil prices fell on Monday as Covid-19 lockdowns in China hurt demand, even as the European Union considers a ban on Russian oil that would restrict supply.

Iron ore prices fell sharply after steel consumption in China in March fell 9.5%.

In Shanghai, even after weeks of restrictions on mobility, authorities have not been able to control the outbreak as expected, and over the weekend, entire buildings were surrounded by fences and tape. In Beijing, cases are also spreading and concern is growing about possible lockdowns in the city, which has promoted a strong rush for supplies.

  • WTI crude, -4.58% at $97.39 a barrel
  • Brent crude, -4.61% at $101.73 a barrel
  • Iron ore traded on the Dalian Exchange plunges 10.73% at 794.5 yuan, equivalent to US$121.10

Bitcoin

  • Bitcoin, -3.30% to $38,431.78 (from 24 hours ago)

2. Schedule

The last week of April arrives with a busy schedule, especially in the corporate sphere. But in addition to the many balance sheets and shareholders’ meetings scheduled for the next few days, the expectation about inflation data continues to give tone to the business. In this sense, the most awaited data of the week will be released next Wednesday (27): it is the preview of the Consumer Price Index (IPCA-15), referring to the first half of April.

Itaú expects an increase of 1.86% in the monthly comparison, while Bradesco projects an advance of 1.84%, still suggesting current inflation at high levels. The reading will be, once again, pressured by administered prices, mainly reflecting the Petrobras readjustment announced in mid-March.

This Monday (25) the Top 5 March report (9 am) and the Frequency Distribution for the same month (12 pm, Brasília time) will be made available. The BC also informed that it will publish on Monday (25), at 3 pm, the Savings Report for March and a preview of April, possibly until the 15th.

Brazil

8:00 am: Weekly IPC-S, with consensus up 1.51% monthly

8am: April Consumer Confidence

USA

9:30 am: March Fed Chicago National Activity Index

11 am: April Dallas Fed Business Activity Index

3. CPIs threaten to lock up the Senate

With the objective of preventing the opening of a Parliamentary Commission of Inquiry (CPI) that will investigate illegalities in the work of evangelical pastors with the Ministry of Education (MEC), the Bolsonarist base articulated to set up three other CPIs, with vague themes and without relationship with the current administration. Unlike the opposition, which is struggling to reach the necessary 27 signatures (it currently has 25 supporters), the ruling base has already surpassed this number for all its requests. The information is from Valor newspaper.

The objective, according to sources heard by Valor, is to wall up Pacheco. Either you don’t accept any CPI or you will have to accept them all.

Barroso condemns the use of the Armed Forces to discredit the electoral process

The Minister of the Federal Supreme Court (STF), Luís Roberto Barroso, said today that there is an intention in the Brazilian political scenario to use the Armed Forces to attack the electoral process in the country. He once again defended the integrity of electronic voting machines and condemned attempts to politicize the military, noting that, so far, the Armed Forces have resisted being the object of “political passions”.

Moraes decides value of fines to Daniel Silveira

After the presidential pardon granted to deputy Daniel Silveira (PTB-RJ), sentenced to eight years and nine months in prison by the Federal Supreme Court (STF), Minister Alexandre de Moraes will determine this Monday the imposition of a fine on the parliamentarian for non-compliance of the precautionary measures imposed on him by the Court.

Salary floor for nurses

The president of the Chamber, Arthur Lira, signed an agreement to vote on May 4 to create a national salary floor for nurses. There is a vast majority among parliamentarians to approve the proposal, although there are still doubts about how to pay the bill. Chamber estimates point to an additional cost of at least R$ 16 billion for public agencies, health plans and philanthropic and private hospitals.

Deadlock on the third way

In yet another sign of the difficulty of the so-called third way parties to reach an understanding in the presidential race, the leaders of the MDB, PSDB, União Brasil and the pre-candidates of the subtitles decided to postpone a dinner that would take place this Monday in São Paulo. to define the rules and the collegiate calendar.

A note released by the advice of former governor João Doria, PSDB pre-candidate, reported that the meeting was postponed at the request of Senator Simone Tebet (MDB-MS) and Deputy Luciano Bivar (UB-PE), both pre-candidates. . In the statement, Doria said that the moment requires “unity”: “Separate we will be defeated and that only interests extremists”, said the toucan.

So far, the three pre-candidates have not reached an understanding on the criteria for choosing the name of the “third way” to run for the Palácio do Planalto.

4. Covid

Last Sunday (24), Brazil recorded 38 deaths and 3,543 cases of covid-19 in 24 hours, according to information from the consortium of press vehicles, at 8 pm.

The moving average of deaths from Covid in 7 days in Brazil stood at 99, down 32% compared to the level of 14 days earlier.

The moving average of new cases in seven days was 13,902, which represents a decrease of 38% compared to the level of 14 days before.

It reached 163,326,952 people fully immunized against Covid in Brazil, equivalent to 76.57% of the population.

The number of people who took at least the first dose of vaccines reached 177,182,940 people, which represents 83.06% of the population.

The booster dose was given to 86,186,500 people, or 40.4% of the population.

5. Corporate Radar

Eletrobras (ELET3;ELET6)

Eletrobras proposed the payment of dividends in the total amount of BRL 1.340 billion, equivalent to BRL 1.99153557854615 per class “A” preferred share and BRL 1.49365168208243 per class “B” preferred share, and to BRL 0 .71578248571496 per common share, on the base date of December 31, 2021. Payment will be made until December 31, 2022.

The updated amounts per share of the respective Dividends will be opportunely disclosed by the Company at the time of their payment, being certain that the Company’s shareholders holding class “A” and “B” preferred shares and common shares, included in the shareholding base on April 22, 2022, the date of its resolution, and as of April 25, 2022, inclusive, class “A” and “B” preferred shares and common shares, issued by the Company will be traded “ex” right to these Dividends.

Cyrela (CYRE3)

Cyrela’s Board of Directors (CYRE3) approved the payment of a dividend in the amount of R$217.1 million, equivalent to R$0.5647788378 per share.

IRB (IRBR3)

The IRB reported a net loss of BRL 50.9 million in February 2022, compared to a profit of BRL 20.8 million in February 2021.

In the first two months of 2022, however, the accumulated net income was BRL 63.2 million, compared to a net income of BRL 38.8 million in the same period in 2021.

(With Estadão, Reuters and Agência Brasil)

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