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SÃO PAULO – The week begins with the market that reverberates the tragedy of Brumadinho (MG), where a tailings dam Vale (VALE3) broke on Friday afternoon (25), leaving a trail of environmental destruction and dozens of deaths.
The break occurred during the São Paulo holiday, when B3 was closed, and resulted in a drop of about 8% in the American Depositary Receipts (ADR) of the company, which represents 20 ADR for Titans from Brazil. traded on the NYSE, was virtually stable. ( Check what to expect for the shares of Vale and Ibovespa on Monday).
Today, ADRs fall by 19% and the Brazilian EWZ ETF (iShares MSCI Brazil ETF) posts a nearly 2% drop in the pre-market.
Investors were also alert to the next steps of the government, a few days after the return of the parliamentary recess and the elections to the presidency of the Chamber of Deputies and the Senate, as well as to closely monitor the meeting of the 2016 FOMC and Sino-US negotiations.
See what to watch this Monday (28):
1. Global Equity
US Stock Index Futures Predict a Disappointing Trading Session as President Donald Trump Is Skeptical of a Republican-Democratic Accord on Building a Wall Along the Border Mexican. Following the temporary suspension of the US government's closure on Friday, Trump told The Wall Street Journal that the new closure is "definitely an option". The temporary suspension pact provides for the allocation of funds to finance the federal administration for three weeks, while the White House and the Democratic Party will continue to negotiate funds for the wall in Mexico.
Investors are still waiting for a new round of negotiations with China to end the trade war between countries. The Chinese government is expected to send its deputy prime minister to Washington, DC, later this week for a new round of talks with Trump's representatives.
In Europe, stock markets are in decline, contaminated by pessimism with the United States and in the expectation of news about Brexit. British Prime Minister Theresa May will work towards an agreement on the exit of the United Kingdom from the European Union on Tuesday 29.
Asian stock exchanges have closed their doors Investors are also pessimistic about the talks between China and the United States. Invest your money better: open an investment account in XP. reflecting the increase for the first time in 2019 the number of probes used by US energy companies to search the product.
China's iron ore is mined at high altitude after the rupture of the Vale dam at Brumadinho. The tragedy raises concerns about supply as safety inspections in other Vale operations could affect the company's production more broadly.
Check the market performance, according to the price of 7:50. * Dow Jones Futuro (United States) -0.45%
* Nasdaq Futuro (United States) -0.56%
* S & P 500 Futuro (United States) -0.46% [19659004] FTSE MIB (Italy) -0.43%
* FTSE (United Kingdom) -0.32%
* CAC-40 (France) 28%
* Hang Seng (Hong Kong) + 0.03% (closed)
* Shanghai (China) -0.18% (closed)
* Nikkei (Japan) -0.60% closed)
* WTI Oil -2.01%, to 52.61 USD per barrel
* Crude oil -1.91% to 60.46 USD per barrel
* Bitcoin 3,326 USD * Futures on iron ore traded on the Chinese stock exchange in Dalian + 2.71%, to 550.50 yuan ([l'année dernière])
$ 13,104 R -3.13% (in the last 24 hours)
in the last 24 hours) [1 9659031] 2. Tragedy in Brumadinho
The rupture of the Vale mining dam in Brumadinho, in the metropolitan area of Belo Horizonte, occurred last Friday (25), when the Brazilian stock market was closed due to holiday in São Paulo. On Friday, the company's ADRs dropped by 13% throughout the day and closed at around 8%. Today, ADRs are down 19%.
Monday (28), the adjustment of the prices of the shares traded on the Brazilian B3 will be made. As Vale holds nearly 11% of Ibovespa 's share, the impact on the stock will have a significant impact on the index.
Although doubts remain as to the causes of the accident and the culprits, Monday and Sunday. Even more dramatic, the death toll is already greater than that of the Mariana tragedy when a dam of Samarco (a company controlled by Vale and BHP) broke down, killing 19 people. In the case of Brumadinho, by the end of this afternoon, 58 deaths had been reported (and 297 missing).
Justice has already blocked a total of 11 billion rubles of Vale, which will be used to help the victims, contain the accident and repair the environment. But it is still early to know if the value is sufficient. The state of Minas Gerais had also requested the blocking of shares held by Vale for up to Rs 20 billion.
In addition, the Vale Board of Directors decided to amend the system of remuneration and incentive because of the rupture of the dam. . Indeed, the mining company informs that the board of directors has decided to suspend the payment of the variable remuneration to the directors as well as the policy of remuneration of the shareholders "and, consequently, the non-payment of dividends and interests on shareholders' equity (JCP), as well as another resolution on the repurchase of shares of its own issue. "
3. Economic Agenda
The calendar is busy this week. The Central Bank today publishes data from the external sector and, on Tuesday (29), the credit numbers, both available, from December. Also Tuesday, the Treasury will release the budget data.
The January unemployment index continues and, according to GO Associados forecasts, it should remain at 11.5%. Finally, the agenda also has industrial production in December, which should record a slight decrease of 0.2% over the period and a drop of 4.5% over the year, according to the GO.
Finally, on the agenda (19459013), which begins to strengthen with three large companies presenting their fourth quarter balance sheets: Cielo (CIEL3), Santander (SANB11) and Bradesco (BBDC4).
Brazil calendar, highlight the first meeting of the 2019 FOMC, Wednesday (30), whose expectation is to maintain basic interest rates. Also in the United States, GO Associados presented Monday November trade balance, December durable goods orders and retail sales releases.
The same day that Fomc publishes its (Gross Domestic Product) of the last quarter of 2018 and the variation of private jobs, known as the ADP report, in January.
In Europe, special attention is given to the likely vote Brexit (leaving the United Kingdom of the European Union) to the British Parliament. The government is running out of time to try to reach an agreement and prevent a "Brexit without agreement" from happening on March 29, which could lead to chaos in border services and relations with European bloc countries [19659004] , in China, Tuesday (29) will be released the industrial and non-industrial PMI of NBS for January. The PMI Industrial (Caixin) of the same month will be released Thursday (31), while the PMI of compounds and services (Caixin) will be announced Saturday (2).
Click here to give the full agenda of the indicators.
4. New Politics
In politics, special attention will be paid to the joints before the congressional elections, scheduled for Friday (1). Until now, the favorites are the deputy Rodrigo Maia (DEM-RJ), candidate for re-election, and Senator Renan Calheiros (MDB-AL). In the Senate, however, the race has warmed in recent days with the announcement of Simone Tebet's candidacy (MDB-MS).
In addition, the attention paid to the new surgery that President Jair Bolsonaro made this Monday for the removal of the colostomy bag at the Albert Einstein Hospital. The operation should last three to four hours. This will be the third operation that the president will do since the attack with the knife in Juiz de Fora, Minas Gerais.
the first 48 hours after the operation, Bolsonaro will return to work still in the hospital. A special office will be set up at the hospital so that the president can carry out his work during the estimated 10 days in hospital stay.
5. Wilson Ferreira Júnior, President of Eletrobras will begin discussions with the new Minister of Mines and Energy, Bento Albuquerque, on the total participation of the l & # 39; Union diluted in the capitalization plan of the company. The information comes from the newspaper Valor Econômico. It is not yet clear whether the new plan will result in the sale of electric power control, but the privatization manager intends to show the government that privatization will bring more value to the company's shares that will remain in the hands of the Union.
>> Electricity : According to Aneel (National Electric Power Agency), the tariff rate on light invoices for February will be green at no cost to consumers.
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