US future indices operate close to stability this Friday (23), before the release of personal spending data for November measured by the PCE, the Federal Reserve’s (Fed’s) favorite inflation index. The Refinitiv consensus predicts a monthly increase of 0.2% and 4.7% on an annual basis for the core index.
On the eve, the Unemployment claims below expectation it’s the 3Q22 GDP higher than expectedprojected a resilient US economy and that the US Central Bank’s efforts to cool the economy are not yet being felt, which could, in theory, postpone possible interest rate cuts.
Asian markets, on the other hand, closed lower, impacted by the losses recorded on Wall Street yesterday (22) and by Japanese inflation reaching the highest level in more than 40 years.
Key consumer prices in Japan rose 3.7% in November on an annualized basis, marking the fastest pace since December 1981.
In Brazil, the release of the preview of the Extended Consumer Price Index (IPCA-15) for December should be highlighted. The indicator will be published at 9 am (Brasília time). The Refinitiv consensus projects an increase of 0.52% compared to November and 5.92% on an annual basis.
Ibovespa today: live market movement this Friday
On the political side, president-elect Lula will meet today (23) with senator Simone Tebet, with the aim of agreeing on the ministry that the parliamentarian will assume in the new government.
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1. World Scholarships
USA
US indices futures operated between gains and losses this Friday morning, the last day before the Christmas holiday, which is likely to register reduced liquidity, with investors waiting for the Fed’s preferred inflation data. The core consumer spending price index (PCE) is expected to rise 0.2% month-on-month and 4.7% year-on-year, according to the Refinitiv consensus forecast.
November data is being released at a crucial time, reflecting the impact of the Fed’s past interest rate hikes in 2022 as the central bank tries to cool the economy. Policymakers decided on their seventh rate hike on Dec. 14, up 50 basis points.
In addition, investors are awaiting the release of new home sales data and the December consumer sentiment index.
See how the futures markets performed:
- Dow Jones Futures (US), +0.12%
- S&P 500 Futures (US), +0.03%
- Nasdaq Futures (US), -0.04%
Asia
Asian markets closed at a general low on Friday, following the negative performance of US stock markets the day before.
On the economic front, Japan’s core consumer price index rose 3.7% in November on an annualized basis, marking the highest level since December 1981. The Nikkei 225, Japan’s main stock index, fell 1.03 %, to close at 26,235 points.
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Members of the Central Bank of Japan’s monetary policy board highlighted the need for their stance dovish (mild) policy, while noting the need to pay attention to the side effects of monetary easing, showed the minutes of their October 27-28 meeting.
Hong Kong’s Hang Seng Index fell 0.3% as investors digested China’s longer-than-expected reopening path after Covid-19 restrictions. China’s Shanghai Composite fell 0.28% to 3,045.87 points.
- Shanghai SE (China), -0,28%
- Nikkei (Japan), -1.03%
- Hang Seng Index (Hong Kong), -0,44%
- Kospi (South Korea), -1.83%
Europa
European markets operate close to stability this morning, after closing in the red during the previous session. The region’s agenda is empty, with no prediction of important indicators or disclosure of relevant corporate results.
- FTSE 100 (UK), +0.11%
- (Germany), +0.14%
- CAC 40 (France), +0.03%
- FTSE MIB (Italy), +0.05%
Commodities
Crude prices rose on expectations of lower Russian oil exports in December, offsetting concerns that an impending snowstorm in the United States could reduce demand for fuel this holiday season.
More than 4,400 US flights were canceled in a two-day period due to the winter storm. The blizzard could also jeopardize drivers’ plans to travel over Christmas and New Year by reducing gas consumption.
Ore prices retreat after three sessions in a row high.
- WTI Crude Oil, +1.23%, at $78.44 a barrel
- Brent oil, +1.01%, at US$ 81.82 or barrel
- Iron ore traded on the Dalian exchange was down 0.18% at 825.00 yuan, equivalent to US$118.03
Bitcoin
- Bitcoin, +0.44% to $16,839.16 (24 hours ago)
2. Agenda
The week ends with the release of the preview of the Extended Consumer Price Index (IPCA-15), for December. The indicator will be released at 9 am (Brasília time). The Refinitiv consensus projects an increase of 0.52% compared to November and 5.92% on an annual basis
Itaú expects a monthly increase of 0.54%, taking the annual rate to 5.9%, from 6.2%. “The reading will be pressured by food at home (especially in natura), gasoline and airline ticket prices. On the other hand, personal hygiene products should show some deflation, even with Black Friday discounts“, wrote the chief economist of Itaú, Mario Mesquita.
In the US, personal spending figures for November measured by the PCE, the Federal Reserve’s (Fed’s) favorite inflation index, are out. The Refinitiv consensus forecasts a slight monthly rise of 0.2% in the core index.
Brazil
8h: IPC-S semanal
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9 am: IPCA-15 of December, Refinitiv consensus projects increase of 0.52% compared to November and 5.92% on an annual basis
USA
10:30 am: PCE price index core, with Refinitiv consensus predicting 0.2% monthly and 4.7% year-on-year gains
10:30 am: November durable goods, consensus Refinitiv projects 0.6% monthly decline
12:00: U. of Michigan Business Conditions Survey
12pm: New home sales
3pm: Baker Hughes rig count
3. Economic news
Budget 2023
Parliamentarians approved the 2023 Budget on Thursday, in symbolic votes that took less than 20 minutes. Senator Marcelo Castro’s (MDB-PI) report had been endorsed minutes earlier by the Joint Budget Commission. The matter now goes for presidential sanction.
The assessment takes place one day after the enactment of the Transition PEC, which had been placed by Castro as a condition for the construction of his opinion. The senator increased the fiscal space for next year to R$169.1 billion after the enactment of the Constitutional Transition Amendment on Wednesday. For this, he considered the expansion of BRL 145 billion in the spending ceiling, another BRL 23 billion referring to extraordinary revenue for investments withdrawn from the fiscal rule, in addition to BRL 1.1 billion in other expenses.
Congress rejects presidential vetoes to LDO 2023
Congress overrode several items of two presidential vetoes. One of the vetoes affected the 2023 Budget Guidelines Law (LDO). Another removed provisions from the law that created the Electronic Public Records System (Serp) and the 2023 Budget Guidelines Law (LDO).
Regarding the LDO, Congress restored the Executive Power’s obligation to respect the nominations of deputies and senators for the execution of the amendments of the general rapporteur. This overthrow will have no practical effect because the Federal Supreme Court (STF) declared the secret budget unconstitutional.
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A veto on works under the responsibility of the Union carried out with money from states and municipalities was also overturned. The LDO will again have a device that created a kind of meeting of accounts in these cases, which allowed the reduction of debt values of local governments with the National Treasury.
4. Political news
Lula will meet with Simone Tebet today
President-elect Luiz Inácio Lula da Silva (PT) will meet this Friday with Senator Simone Tebet (MDB-MS). The meeting aims to decide which ministry the parliamentarian will occupy, Planning or Environment. Globo already claims that she can go to the Ministry of Cities.
To interlocutors, Tebet had mentioned his desire to occupy the Social Development portfolio, which yesterday was assigned to former governor and senator-elect Wellington Dias (PT).
Alckmin in Industry reveals the importance of the country’s reindustrialization, says Fiesp
The Federation of Industries of the State of São Paulo (Fiesp) considered this Thursday, in a note distributed to the press, that the appointment of the elected vice-president of the Republic, Geraldo Alckmin, to head the Ministry of Industry reveals the importance that is being given to reindustrialization of the country by the government that will take office in ten days.
“May public policies be successful in this regard”, wishes the entity in the note, in which it celebrates the recreation of the folder, delivered to Alckmin after refusal by the president of Fiesp, Josué Gomes. The entrepreneur faces an internal movement that tries to remove him from the command of the employer.
Covid
This Thursday, Brazil recorded 165 deaths from covid-19 in the last 24 hours, totaling 692,572 since the beginning of the pandemic.
With that, the moving average of deaths in the last 7 days is 134. Compared to the average of 14 days ago, the variation was +33%.
In total, the country registered 43,392 new diagnoses of Covid-19 in 24 hours, completing 36,080,427 known cases since the beginning of the pandemic.
5. Corporate Radar
To Petrobras (PETR3;PETR4) informs that it has finalized the sale of its entire stake in the Papa-Terra production field, located in the Campos Basin, for the company 3R Petroleum (RRRP3).
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The operation was completed with the cash payment of US$ 18.2 million to the state-owned company, already with the adjustments provided for in the contract. The amount received today is added to the amount of US$ 6 million paid to Petrobras when the sales contract was signed.
IRB-Brasil Resseguros (IRBR3) approved the reverse split of all 2,467,890,331 common shares issued by
company, in the proportion of 30 shares converted into 1 share, without changing the share capital.
The mining company Vale (VALE3) approved new design of the Executive Committee, in order to adapt to the strategic changes carried out in recent years. The company has substantially simplified its portfolio, focusing exclusively on businesses and geographies where it has clear competitive advantages.
(With Estadão, Reuters and Agência Brasil)
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