Finance & Market Bulletin - November 2021

By Daniel Christian Henrique

Golden Bull, IBOV and the “Godzilla of Selic”

The month of November at B3 was marked by the inauguration of his sculpture of the “golden bull” (B3, 2021), a Tupiniquim version of the Wall Street sculpture in New York, but looking for a new design and concept, according to its author. This representation is intended to signal the bull market of the stock market, denoting its strength, or even the vigor of the nationality it represents. However, in a short time it was withdrawn after much controversy (BBC, 2021). To make matters worse, the IBOV was marked in November by another month of profitability losses of -1.35% (ECONOMATICA, 2021), while the Selic took its biggest monthly increase, with 0.587%, in the continuous increase in its profitability since the beginning of the year. With this drop in the Ibov, B3 is already suffering from the second worst performance of 2021 among the world's stock exchanges, losing only to Venezuela - according to data from the rating agency Austin Rating (SUNO, 2021).

Here is the question that ran among some investors on the opening day of the B3 Golden Bull: here in Brazil, the strong tradition of fixed income investments is still in force, added to the weak performance of B3 in the year and with the resumption of highs of Selic, wouldn't it be more opportune to create a “Godzilla of Selic” in front of the Central Bank?!

Source: ECONOMÁTICA (2021)

It is important to highlight that a significant part of the IBOV drop in November came in line with the fall of world stock exchanges with the dissemination of the new omicron variant, whose impact is still unknown, causing fears in the markets. The fear has also affected the Industrial Entrepreneur Confidence Index (ICEI), which has already fallen by 7.2 points in the last three months, reaching 56 points (PORTAL DA INDÚSTRIA, 2021).

Third quarter GDP - it was almost

In addition to the second worst position among stock exchanges in the world, the Austin Rating ranking also points Brazil in the 26th position among 33 possible in the ranking of GDP ranking, behind its South American neighbors: Colombia (5.7%), Chile (4.9%) and Peru (3.6%) (SUNO, 2021).

IBGE released Brazilian GDP data related to the third quarter. There was a regression of -0.1% in relation to the second quarter, which in turn also came from losses of around -0.4% in relation to the first, entering a technical recession. The main responsible for the fall in this last quarter was the agricultural sector, accumulating significant losses of 8%, while the industry remained unchanged (0.0%) and Services had a slight increase of 1.1% (IBGE AGENCY, 2021a) . This scenario was further supported by the drop of 9.8% in exports of goods and services. Exports were also impacted by the decline in agriculture, heavily impacted by the end of the soybean harvest, the country's most relevant commodity (AGÊNCIA IBGE, 2021b). Federal government agencies, in turn, still attributed the reductions in agriculture to the harsher climate problems of winter, causing frosts, as well as the biggest water crisis in the last 90 years (AGÊNCIA BRASIL, 2021).

Source: BRAZIL AGENCY apud IBGE (2021)

The GPFA has been carrying out scientific reports measuring the impact on food prices of frosts and other climate changes, such as droughts and excessive rainfall. See the price variations of Arabica coffee produced in the south and southwest of Minas Gerais by CLICKING HERE and the price variations of tomato, lettuce and tomato in the city of São Paulo by CLICKING HERE.

Expensive Floripa.... but competitive

In October, Florianópolis was credited with being one of the capitals with the most expensive food basket in the country and won the Top 1 in November, with the most expensive food basket among all capitals, reaching the expressive value of R$ 710.53, as reported. in the monthly survey by DIEESE (2021). The monthly survey report also reports that to bear this cost, a family of four would need a minimum wage equivalent to 5.4 times the current value for the capital of Santa Catarina.
However, good news also appeared in November: it is the most competitive capital in the country, according to the Municipality Competitiveness Ranking. Overall, Floripa still took third place, only behind the cities of Barueri and São Caetano do Sul in São Paulo (OBSERVATÓRIO FIESC, 2021). Some of the reasons for his leadership were: time needed to open a company, quality of accounting and tax information, qualification of servers, transparency, costs of administrative functions, among others (SINDIFISCO, 2021).

Galloping IPCA-15

This index is a preview of inflation for the period under review. It continues to gallop on the October continuum, now jumping to a high of 1.17%. In the accumulated result for the year, it already accounts for 10.73% increase. The transport segment leveraged the index, with yet another spike in gasoline prices (IBGE, 2021).

Source: IBGE (2021)

The meat withered

It wasn't just the Golden Bull that was cancelled, beef continues to suffer in the period with the Chinese embargo, its biggest buyer, resulting in the worst November for exports since 2016, with a 51.6% retraction compared to November of the year past (CHANNEL RURAL, 2021). To make matters worse, there seems to be no forecast by specialists in the area for the resumption of exports to the Asian country (NOTÍCIAS AGRÍCOLAS, 2021). Meanwhile, in the domestic market, the price of beef, despite some relief, remains high for Brazilians. Salty, for now, just the price, but not the meat on the plate...

References

AGÊNCIA IBGE. PIB varia -0,1% no 3º trimestre de 2021. Available in: https://agenciadenoticias.ibge.gov.br/agencia-sala-de-imprensa/2013-agencia-de-noticias/releases/32388-pib-varia-0-1-no-3-trimestre-de-2021. Access on: 03 nov. 2021a. 

AGÊNCIA IBGE. PIB fica em -0,1% no terceiro trimestre influenciado por queda na agropecuária. Available in: https://agenciadenoticias.ibge.gov.br/agencia-noticias/2012-agencia-de-noticias/noticias/32387-pib-fica-em-0-1-no-terceiro-trimestre-influenciado-por-queda-na-agropecuaria. Access on: 03 dez. 2021b. 

AGÊNCIA BRASIL. Fatores climáticos levaram à queda do PIB, diz secretaria. Available in: https://agenciabrasil.ebc.com.br/economia/noticia/2021-12/fatores-climaticos-levaram-queda-do-pib-diz-secretaria. Access on: 03 dez. 2021. 

B3. B3 inaugura escultura Touro de Ouro no centro de São Paulo. Available in: https://www.b3.com.br/pt_br/noticias/b3-inaugura-escultura-de-touro-de-ouro.htm. Access on: 03 nov. 2021 

BBC. Família de criador do Touro de Wall Street diz que não foi consultada sobre versão da estátua no Brasil. Available in: https://www.bbc.com/portuguese/geral-59327824. Access on: 03 nov. 2021. 

CANAL RURAL. Carne bovina: embargo chinês resulta em pior novembro para exportações desde 2016. Available in: https://www.canalrural.com.br/noticias/embargo-china-queda-exportacao-carne-bovina/. Access on: 03 dez. 2021. 

DIEESE. Pesquisa Nacional da Cesta Básica de Alimentos. Available in: https://www.dieese.org.br/analisecestabasica/2021/202111cestabasica.pdf. Acesso em 07 dez. 2021. 

ECONOMATICA. Plataforma financeira. Available in: https://economatica.com/plataforma-financeira. Acesso em 03 nov. 2021. 

IBGE. IPCA-15 - Índice Nacional de Preços ao Consumidor Amplo 15. Available in: https://www.ibge.gov.br/estatisticas/economicas/precos-e-custos/9260-indice-nacional-de-precos-ao-consumidor-amplo-15.html?=&t=destaques. Access on: 03 nov. 2021. 

OBSERVATÓRIO FIESC. Florianópolis é a Capital mais competitiva do Brasil, mostra Ranking dos Municípios do CLP. Available in: https://observatorio.fiesc.com.br/publicacoes/rankingclpmunicipios. Acesso em 03 dez. 2021. 

NOTÍCIAS AGRÍCOLAS. Com embarques para a China travados, exportação de carne bovina caiu pela metade em novembro. Available in: https://www.noticiasagricolas.com.br/noticias/boi/303881-com-embarques-para-a-china-travados-exportacao-de-carne-bovina-caiu-pela-metade-em-novembro.html#.YaqahtDMLIU. Access on: 03 nov. 2021. 

PORTAL DA INDÚSTRIA. Estatísticas. Available in: https://www.portaldaindustria.com.br/estatisticas/icei-indice-de-confianca-do-empresario-industrial/. Access on: 03 nov. 2021. 

SINDIFISCO. Por que Florianópolis é a capital mais competitiva do país. Available in: https://www.sindifisco.org.br/noticias/por-que-florianopolis-e-a-capital-mais-competitiva-do-pais. Access on: 03 dez. 2021. 

SUNO. Ibovespa está na lanterna das bolsas de valores do mundo em 2021; veja aqui. Available in: https://www.suno.com.br/noticias/ibovespa-ranking-bolsas-mundiais/. Access on: 03 dez. 2021.