IBOVESPA had a very mixed week which was interrupted by the holiday on November 2nd (Finados). The week started off well with the index making gains on Monday, but the political turmoil and confusions surrounding the constitutional amendment (PEC dos precatórios) caused volatility into the index which made strong losses on Thursday, hitting lows last seen over a year ago. This performance has been way below expected returns for foreign portfolios and stock markets mostly due to the political noise in Brazilian, a deteriorating fiscal situation, and higher interest rates as signaled by the BCD during its last meeting.
Despite the poor economic performance of the index, Bradesco, Brazil’s 2nd largest bank, posted record profits for the third quarter with a ROC (return on capital) way above its peers - with a particularly strong performance from the insurance division, and very limited defaults despite a more challenging economic environment. The results, divulged on Thursday after the market closed, exceeded market expectation which made the stock rally almost 5% this Friday.
On the international front, tensions were focused on the fed, who signaled the gradual removal of stimulative measures, reducing bond purchases by 15 billion dollars. Markets also performed well following US job postings which surpassed expectations this Friday.
Written by: Bruna Zarzur
Edited by: Anna Kissajikian