Why did the Ibovespa virtually shut down after the euphoria of the truce between the United States and China?

SÃO PAULO – The first trading session of December began with a wave of euphoria in the markets, guided by the truce in the trade war between the United States and China. The news led Ibovespa to exceed its historical high on Monday (3), but the movement did not hold and the index remained stable.

Ibovespa closed with a slight peak of 0.35% to 89,820 points, after reaching 91,242 points at the height of the day. At about an hour from the end, the main index of the Brazilian stock market began to lose strength. This movement was followed by the commercial dollar which, after reaching R $ 3.8194, closed with a drop of "only" 0, 35%, quoted at R $ 3.88423 on the sale, at the peak of day.

No news explaining the move was made, it was mainly the realization of investor gains after strong gains earlier. The change of course was led by the banks. Bradesco (BBDC4) and Itaú Unibanco (ITUB4) saw a sharp decline. Despite this, a number of factors encourage investors to be cautious.

The market also slowed the dynamics of the local scenario, in the perspective of reforms that remain stagnant. Investors are still watching the voting schedule for this expensive task, which is a formidable catalyst for Petrobras, but has not yet been approved. At the same time, the market is also following rumors that Palocci delinquency would involve financial market players.

On the other hand, steel makers rose sharply after the announcement of the US-China truce. The agreement reached between the countries was concluded this weekend at the G-20 summit, which had repercussions on the stock markets around the world and on the commodities market.

Performance was positive in the commodities market, with iron ore up nearly 2% and oil up more than 3%, after the input was the worst week since a decade at the end of November.

Soaring oil is also influenced by the decisions of Russian and Saudi leaders meeting at G-20, to expand a pact to control prices in the market – although the two countries have not yet confirmed further reductions in their production.

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Still on the radar of the oil market, Qatar has decided to withdraw from the OPEC (Organization of Petroleum Exporting Countries) from 1 January in order to focus on its project. increase its gas production

China and the United States

Presidents Donald Trump and Xi Jinping have agreed not to impose additional tariffs on their exports, creating a truce in the trade war that lasts for weeks and putting pressure on the financial markets.

With the agreement reached at the G-20 this weekend in Argentina, the United States has suspended the increase in tariffs to 25% of the $ 200 billion worth of Chinese goods that would come into effect on January 1st. On the other hand, China is committed to increasing its purchases in the North American market of agricultural, energy and industrial products.

The break will last 90 days, during which China and the United States will try to resolve their trade disputes in new negotiations. The White House has also indicated that countries will be negotiating in the coming weeks negotiations including trade, technology transfer, intellectual property, non-tariff barriers, computer theft and agriculture.

If they do not reach a trade agreement within 90 days, the countries agree to raise the US tax rate on Chinese products from 10% to 25%.

For Credit Suisse badysts, the calendar seems "pretty tight", especially if we take into account the Christmas and New Year holidays in the West and Chinese New Year. For them, the short deadline set by the US government is intended to put pressure on the Chinese government for it to show signs of goodwill and swift action.

If the Chinese government is really ready to end the trade war, it is likely to announce domestic reforms and send signs to the market during the meeting. Chinese Central Economic Work Conference in mid-December.

Highlights of the Stock Exchange

The highest increases, among the values ​​comprising the Bovespa index, were as follows:

		1
1
USIM5	ANI USIMINAS	9.79	+4.71	+8.05	213.95M
GGBR4 [1965] 19659026] GERDAU PN ED	16.5	+4.33	+33.60	356.32M
GOAU4	GERDAU MET PN ED	7.60	] +3.83	+34.76	204.28M
SCNC3	SID NACIONALON	9,18	+3,49	+9.55		PCAC4	P.ACUCAR-CBDPN	85.98	+3.08	+10.50	158.55M

The biggest victims among the victims Year Year Flight ¹ RAIL3 RUMO SA ON 16.78 -3.78 [1 9659029] +29.38 218.87M SMLS3 SMILES ON 43.40 -1.81 -39.82 41.88M IGTA3 IGUATEMI ON 38.44 ] -1.76 -0.57 52.49M BBDC4 BRADESCO PN 1.72 +23.63 882.02M MGLU3 MAGAZ LUIZA ON 162.13 -1.52 +106.6 The most traded stocks, among which the Bovespa index, were as follows:

Code	Assets	Cot R $ [19659084] Var%	Vol 1	] 19659102] 19659102] 19659102] 19659101] 19659101]	PETR4	PETROBRAS PN EJ N2	25.94	+1.89 [19459109]		VALE3	VALE ON	54.11	+2.48	1.75B	1.15B	68.770
BBDC4	. 19659101] BRADESCO PN	37.80	-1.72 [19659102] 882.02M	608.54M	53501
ITUB4	ITAUUNIBANOPN EDB	35.55	-1.26	859.35M		60M	53.293	PETR3	PETROBRAS ON EJ N2	28.93	+2.84	626.71M	328.54M [196596] 19659107] BRFS SA	BRF SA ON	22.55	+1.71	622.46M	134.54M	23,391
23,391
] 23591
BBAS3	BRASIL EJ	44.10
-1.19		552.08M	554.01M	38,483
ABEV3	AMBEV S / [19659101]							461.67M	306.67M	44.961
	356.32M	255.06M	25743
B3SA3	B3 ON	28.15	– 0.18 [194] 59010]	319.96M.	266.74M	37.323

^* – Batch of Thousands of Acts
¹ – In Reais ( K – Thousand | M – Millions | B – Billion) The Political Topical
The Selection Criteria of Ministers and the Model Political Articulation Adopted by President-Elect Jair Bolsonaro (PSL) informs the Folha de S. Paulo newspaper with which the next government enters the field with an unstable coalition in Congress. Half of the country's major parties say they intend to work with the president-elect, but only 3 of the 15 largest abbreviations in the House of Representatives say they are willing to formally integrate the governing base.

Relations between these parties and the new government indicate that Bolsonaro will have a lean core of political support. To approve projects that interest him, the president-elect will also rely on sympathetic acronyms on his agenda, but remaining in distant orbit.

Folha's team of rapporteurs consulted with the presidents, leaders and leaders of the 15 largest parties in the House. In addition to the Bolsonaro PSL, only DEM and PTB are considering formal membership of the allied base of the next government.

Paulo Guedes canceled a trip he would make to Europe this week for health reasons, according to Folha de S.Paulo. The future Minister of Economy Jair Bolsonaro is afflicted and has a high fever and should stay home to treat an infection.

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