The US futures indices are working lower while the Asian and European markets trade without a single direction this Wednesday (9) as relevant indicators are absent and awaiting the results of the US congressional midterm elections.
The election will decide whether Democrats retain their narrow majority in the House and Senate, or whether Republicans take control of one or both houses of the legislature, an outcome that would spell a significant shift in power in Washington.
For analysts, the result could make all the difference for Democratic President Joe Biden, whose legislative hopes rest on whether Democrats can push his agenda through a bipartisan Congress.
In Brazil, attention continues to focus on the change of government and the reporting season. After Bradesco’s disappointing result last night, Banco do Brasil and Eletrobras are on the balance sheet agenda.
Regarding the transition news, Presidentelect Luiz Inácio Lula da Silva will meet this Wednesday (9) in Brasília (DF) with the Presidents of the Chamber of Deputies, Arthur Lira, and the President of the Senate, Rodrigo Pacheco. ) to bang the gavel on the PEC, which will absorb spending not foreseen in next year’s budget.
As for the indicators, investors are waiting for September’s retail sector sales, the release of which is scheduled for 9 am.
1. World Scholarships
United States
US futures indexes are pulling back after opening higher, with investors eyeing the results of the midterm elections known as the “Mid Term”.
Projections show that Republicans are expected to command a majority in the House of Representatives, but by a narrower vote than recent polls projected, while the dispute over control of the Senate is open and heated.
On the economic front, investors are waiting for September’s wholesale inventory numbers at 12:00 ET. The market consensus is for a 0.8% gain, slowing down from the 1.3% gain in the previous month.
Check out the performance of the futures markets:
- Dow Jones Futures (US), 0.29%
- S&P 500 futures (US), 0.27%
- Nasdaq futures (US), 0.23%
Asia
Asian markets ended with no clear direction as investors digested the results of the US midterm elections and China’s Producer Price Index (PPI) fell in October for the first time since December 2020.
In forex trading, the Chinese yuan posted its best day in two years on Friday and has since held most of those gains, but retreated Tuesday to trade at 7.2553 against the dollar as fresh outbreaks of Covid19 dampened some optimism .
- Shanghai SE (China), 0.53%
- Nikkei (Japan), 0.56%
- Hang Seng Index (Hong Kong), 1.20%
- Kospi (South Korea), +1.06%
Europe
European markets are also moving in no defined direction on Wednesday (9th), with investors in the region awaiting definitions on the US midterm elections.
On the corporate side, quarterly results continue to be one of the most important drivers of share prices in Europe.
Shares in German pharmaceutical company Evotec fell more than 11% after the results, while shares in Smiths Group rose 5% after the British engineering firm reported a 13% rise in organic sales.
- FTSE 100 (UK), 0.37%
- DAX (Germany), 0.33%
- CAC 40 (France), 0.04%
- FTSE MIB (Italy), +0.42%
Were
Oil prices are lower in today’s session as fuel demand concerns mount amid worsening Covid19 outbreaks in China, the top oil importer, and nervousness over the outcome of the US midterm election.
On the other hand, iron ore contract prices continue their upward trend, rising for the seventh straight day amid concerns about a surge in new Covid19 cases in some Chinese cities and weak steel demand.
Iron ore prices remain high after China’s interbank market selfregulatory body announced on Tuesday it would extend bond financing to private companies, including real estate developers, with support from the central bank.
- WTI Oil, 0.54% at $88.43 a barrel
- Brent Crude Oil, 0.31% at $95.06 a barrel
- Iron ore traded on the Dalian Exchange rose 2.62% to 686.00 yuan, equivalent to $94.80
Bitcoin
- Bitcoin, 1.14% to $18,028.75 (from 24 hours ago)
2. Schedule
The Brazilian Institute of Geography and Statistics (IBGE) will release retail sales figures for September at 9:00 am.
“Considering retail sales, we expect the core index to remain marginally stable and the broad index, which includes vehicles and building materials, to gain 0.1% mom,” Itaú says. The bank notes that seasonal adjustments in retail sales are significantly unstable, particularly across the broad index. It’s therefore important to monitor the yeartoyear variation Itaú forecasts a 1% fall in retail sales in September on that basis of comparison.
On the political agenda is the meeting of the Presidentelect Luiz Inácio Lula da Silva with the Presidents of the Chamber of Deputies Arthur Lira and the President of the Senate Rodrigo Pacheco this Wednesday (09) in Brasília (DF).
Brazil
9:00 am September retail sales, Refinitiv forecast up 0.2% vs August and up 1.4% yoy
10:00 am: Lula, Presidentelect, meets with the Speaker of the Chamber of Deputies, Arthur Lira
1 p.m.: Lula meets with Senate President Rodrigo Pacheco
PDR
3:30 p.m. InfoMoney interviews Luiz Novais, CFO of Pague Menos, as part of the Inside the Results project, which speaks to executives of publicly traded companies to discuss the results. Check out the full schedule and ask your question.
United States of America
12 p.m.: wholesale stocks
12:30 p.m.: Weekly Oil Inventories EIA
3. Business News
Chamber approves MP opening additional credit for payment of benefits
The Chamber of Deputies approved a number of interim measures yesterday. Among them is the article opening an extraordinary credit of R$27.09 billion for the payment of welfare payments in this year’s budget. The matter goes to the Senate.
According to the text, funds are earmarked for the Ministry of Citizenship to pay a R$200 (R$25.5 billion) increase in the Auxílio Brasil program and the appreciation of Auxílio Gás (R$1.04 billion). enable. . The measure allowed an additional R$41.25 billion to be paid outside the spending cap by the end of the year to increase welfare payments and reduce ethanol taxes. The MP was approved without amendment by the Rapporteur, Deputy Alex Manente (CitizenshipSP).
Joint committee approves amendments to budget 2023
The Joint Budget Commission (CMO) yesterday approved changes to the draft Annual Budget Act (LOA) for 2023.
The approved amendments now included in the budget allocate R$1.5 billion to Mobile Emergency Services (Samu 192); R$950 million to support the agricultural sector and family farming; BRL 500 million for the completion of a section of the Transamazon Highway between Altamira and Rurópolis (PA) and BRL 400 million for primary medical care.
The CMO also decided to change the deadline for processing the LOA 2023 project (PLN 32/2022) for the third time. The Commission now has until November 16 to hold public hearings and expects to vote on the revenue report by November 23.
4. Political News
Alckmin and Senator Castro postpone meeting on PEC; Lula goes to Brasilia
The general rapporteur for the 2023 budget, Senator Marcelo Castro (MDBPI), reported yesterday that the meeting with Vice Presidentelect Geraldo Alckmin to present the transitional PEC, previously scheduled for this Wednesday 9th, has been cancelled. According to the congressman, Alckmin asked for the meeting to be postponed as the text of the proposal would first be presented to Presidentelect Luiz Inácio Lula da Silva.
This Wednesday, Lula is meeting with the Presidents of the Chamber, Arthur Lira (PPAL), and Senate, Rodrigo Pacheco (PSDMG) in Brasília. The PT must discuss the PEC with both. Today Alckmin met with Castro and the President of the Mixed Budget Commission (CMO), Deputy Celso Sabino (União BrasilPA). The caretaker government is negotiating a way to keep campaign promises like keeping Auxílio Brasil at BRL 600 outside the spending ceiling the rule that limits government spending growth to last year’s inflation.
covid
Brazil this Tuesday recorded (8) 95 deaths from Covid19 in the last 24 hours, for a total of 688,539 since the pandemic began.
This brings the 7day rolling average of deaths to 38. Compared to the average 14 days ago, the deviation was 44%.
Overall, the country recorded 11,970 new diagnoses of Covid19 in 24 hours, completing 34,909,480 known cases since the pandemic began.
The accounting season continues in full swing with Banco do Brasil, BRF, Carrefour Brasil, Eletrobras, Petz, IochpeMaxion, Alupar, Equatorial, Hapvida, Santos Brasil, Simpar, SulAmérica, Taesa, TC, Ultrapar, Rede D’Or , Positivo , Porto Seguro, Oi, Natura, MRV, Moura Dubeux and Minerva are expected for the day.
Bradesco (BBDC4)
Bradesco (BBDC4) recorded BRL5.223 billion in recurring revenues for the third quarter of 2022 (3Q22), down 22.8% from the same period in 2021. Earnings came in below Refinitiv’s forecast of BRL 6.76 billion.
“The main reasons for this result were the development of the financial margin versus the market, which was negatively affected by the current Selic level, the increase in the extended PDD due to the default scenario, the strengthening of the supplementary PDD and the impact of the IPCA deflation on the Financial result of the insurance,” explains the bank.
Check the balance sheet highlights
Accounting net income for the third quarter of 22 was R$5.211 billion, down 21.6% compared to the same period in 2021.
Braskem (BRKM5) reported a net loss of BRL1.103 billion for the third quarter of 2022, compared to a net income of BRL3.537 billion for the same period in 2021, the petrochemical company said. The Refinitiv consensus forecast net income of R$633.5 million for the period.
Recurring earnings before interest, taxes, depreciation and amortization (Ebitda) for 3Q21 were BRL1.967 billion, down 74% compared to 3Q21 and below Refintiv guidance of BRL3.237 billion.
(With Estadão, Portal and Agência Brasil)
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