Saturday , July 31 2021

Bolson Effect: São Paulo Stock Mark marks the third consecutive record | International



São Paulo's stock market closed Jair Bolsona's first week of power beating his third consecutive record on Friday.

Although caution appeared in the middle of the wave of optimism due to the declarations of the ultra-right leader who created some confusion.

Bolsonaro assumed his post on Tuesday, January 1 and the next day's index Ibovespa closed for the first time over 90,000 points (up to 91,012), increasing by 3,56%.

On Thursday, the increase was 0.61%, and this day by 0.3% (to 91.840 points).

During the last session, the index reached more than 92,000 points, backed up with good employment data in the United States, and cautious comments from Federal Reserve Chairman Jerome Powell on interest rates.

Indeed, on the other hand, there was higher weekly valuations for three months and closed at 3,713 units per dollar, compared with 3,874 on December 31st.

The value of the Brazilian currency this week was 4.32%.

But the controversial former military 63-year-old man calmed the initial big blow with several statements, which implies that, for example, reform of the pension system, which are considered vital from the markets to ease the stifling fiscal situation in Brazil, will be less bold than expected.

For consulting Capital Economics, Brazilian markets "had strong performances" this week dragged by the optimism that provokes a reformist agenda that Bolsonaro promised.

This includes a broad program of privatization, a reduction in the size of the state and public spending.

"But we believe that this bounce may lose steam in a short time (…). There is still little evidence that Bolsonaro and its economic team can promote satisfactory pension reform, in a very fragmented Congress of Brazil ", they stressed.

Bolsonaro created some disorientation, also expressing this Friday his "Concern" about the future of the Brazilian aircraft manufacturer Embraer, following an alliance with American Boeing.

"This merger will be very good, but we can not, as in the last proposal, leave that within five years it can be transferred to the other side," he said.

Following these statements, Embryoer's ordinary shares fell 5.02%.


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