Guest Contributor – Market in Five Minutes (Brazil) –
“Nothing changes” – Ricardo Ferraço, Labor Reform rapporteur on the defeat at CAS.
Track of the day
Pearl Jam – Vitalogy
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00:10 – Drowning
Even if the STF decides to arrest Aécio Neves, it is more likely that his fellow senators will keep him free and also file the cassation request of the one who was the greatest toucan expression in the country.
Still, even if the STF decides to bring suit against Temer, the president is more likely to escape the inquiry after a vote in the Chamber – only 171 votes (number that speaks for itself) are needed for the case to be closed.
PMDB and PSDB are curled up and embraced, a “one hand washes the other” scheme for mutual salvation in plenary. The landing of the PSBD, which can “occur at any moment”, according to comments from some toucans, depends very much on how the party will want to deal with Aetius, who, with greater hope, has become the party’s biggest problem.
Anyway, nobody knows what’s going to happen (as I said) yesterday, I have difficulty knowing even what has happened), and there are many comments I read of the type: “In the face of uncertainties, investors are groping in the dark.”
My question is, “When were the investors right and the future blossoming clearly on their faces?”
Periods like the one we live only make our passive condition more explicit, but as much as we like to deny, we never knew, nor will we know, what awaits us next week.
Just when everyone was more confident – and bought into the thesis of a new Brazil – was the black ox (swan ?!) of Joesley came and knocked everyone off the horse.
Investing is like waking up in the middle of the night to go to the bathroom without being able to turn on the lights – if you run out, you risk stepping on the Lego pieces scattered on the floor, but if it takes too long, it will get dirty.
01:25 – Someone’s Gotta Pay Pizza
In the middle of the afternoon (at 3:00 p.m.), we will know how the Caged came – the expectation is of 18 thousand jobs in May – even if it is not much, we can have the confirmation (or not) of a tendency to stabilize unemployment.
Even if times are bleak – the information that the PF would have ended by the passive corruption of Temer and Loures certainly does not help – the economy is getting in the way, and little by little, the country is coming out of the mud. We still do not know how long and what the impacts of this new political crisis are, but for the second quarter, consolidated data has been better.
In one way or another, the knot will have to be untied and, with the benign environment (at least for now), Brazilian interest rates remain attractive – where in the world is the real interest paid of six or more Percent?
Any investment book makes clear the risks of investing in emerging countries (corruption, political instability, weak currency …) – the gringo is more concerned about whether the economic team will stay than the name of the president. Temer went from decorative vice to decorative president.
It is so easy to attract foreign capital that our Argentine “hermanos”, after little more than a year of the last default, have captured almost 3 billion dollars with a bond of 100 years (CEM YEARS !!!) and demand was 3, 5x the total offered!
There are two lessons in the episode: (1) investors never learn; And (2) with low interest rates out there, it is very easy to capture.
Even if the reforms here do not pass, Meirelles still counts on the foreign appetite for Brazilian assets.
If you can not cut expenses, sell assets and increase revenue. The Farm is opening all the drawers and looking for those hidden coins to pay for the pizza delivery guy who knocked on the door – in fact, all the parliamentarians want is a well-baked pizza.
Janot signaling amnesty for box 2 is the pizzaiolo of the time.
03:50 – Chosen by Finger
If the environment is always uncertain, the business is to use all the help possible. Diversify, hire insurance and always distrust your own beliefs.
Luciana, who knows this well, is always on the lookout for the managers and does not usually give a leash to those who look after the bottom as if she had a crystal ball. More than that, she has hand-picked the best funds to ensure you have a quiet retirement, and like the gringo, you do not have to lose sleep with every negative news coming from Brasilia.
The SuperPreview is thereAnd if you have not hired yet, I’m sorry, but you’re wasting your time. It will not last forever!
04:20 – Fear More Isolated Than Brits
Outside, climate is not for many friends – oil continues its collapse with oversupply and has another day of downfall. Meanwhile, some Fed boys signaled a bigger monetary tightening, which helps to bring down Stock Exchanges worldwide.
Amid the start of the Brexit talks, the pound again weakens, which is not necessarily bad for the UK. Weaker currency boosts exports and helps to correct the trade balance problem. In fact, fundamentally, the meaning of the pound was already this, the Brexit only perhaps has accelerated the process.
There are good outlets of trade and financial alliances for Brits – signaling that the US and UK could establish a banking alliance certainly corroborates the thesis.
If anyone thinks that only England has to lose with the exit of the block. On the contrary, I think that, no matter how much the Brussels bureaucrats try to deny, the euro is perhaps in a more delicate position, despite the good winds of the French election results.
Here, the Bolsa, which was already accompanying the external bad mood, made good on the rejection of the labor reform in the Senate Social Affairs Commission (CAS) – the tight score of 10 to 9, although it did not change the reform process in the Practice, it signals that Temer is losing what little support he still has.
The reaction seems to me very exaggerated, with the prophets of the apocalypse pointing out that the reform has been wrecked. For now, everything indicates that will happen in plenary. Sure enough, good news for Temer is not.
Anyway, real depreciates strongly and interest rates open a lot.
PS: The death of an American student who has been held in North Korea for little more than a year will certainly not help to improve relations between the two countries; There are three more Americans detained in Evil Korea. It remains to be seen how Trump will handle the situation.