Ibo Vespa withdraws due to uncertainty over US interest rate cut | Finance

By avoiding more risks, blue chip stocks Further negative balance sheets of listed companies also weighed on the Brazilian stock exchange.

Ibo Vespa’s 9.5% gain through Tuesday (11th) also created room for profit taking. In the end, the index fell by 0.30% to close at 157,162,000 points after fluctuating between 156,509,000 and 159,319,000 points. Total funds raised for this session amounted to R$22.6 billion in the Index and R$28.9 billion in B3. In New York, the Dow Jones fell 1.65%, the S&P 500 fell 1.66% and the Nasdaq fell 2.29%.

The more negative market move was influenced by statements from U.S. central bank board members such as Susan Collins, Rafael Bostic and Beth Hammack, who defended keeping interest rates at current levels. In this scenario, market opinion is quite divided regarding continued declines in interest rates, as shown by the federal funds futures contract. According to CME Group data, there is a 50.6% chance that interest rates will stay between 3.75% and 4%, and a 49.4% chance that interest rates will fall in December.

In the view of Marcelo Calvelis, CIO of Avin Asset, US interest rates remain at very restrictive levels, which could further cool the labor market in the medium to long term. He noted that there is room for two or three 0.25 percentage point rate cuts due to changes in the Fed’s board of directors in 2026, including Fed Chair Jerome Powell.

“There is a stubborn element to U.S. inflation due to several factors, including labor market supply constraints, tariff issues, and global dollar devaluation,” the executive said. Despite the lack of official data after 43 days of “shutdown” (paralysis) of the U.S. public sector, there is a feeling that “the decline in employment may be reflected in an increase in the employment rate,” he said.

More negative balances weighed on stocks this Thursday, with Banco do Brasil ON falling 1.40% after it reported a decline in annual profits due to pressure on agribusiness. Credit provision amounts and default rates also skyrocketed. From July to September, BB showed an adjusted net profit of R3.785 billion, which was stable on a quarterly basis but decreased by 60.2% for the year.

“Despite growth in the extended agricultural portfolio and continued decline in coverage ratios, fundamentals remain a concern due to deteriorating portfolio quality and rising default rates,” assesses Pedro Gonzaga, partner and principal variable income analyst. “Short defaults continue to increase significantly.”

A more pronounced reaction was seen in Hapvida’s common stock, which fell by 42.2% to R$18.89. The company’s third-quarter results confirmed the hypothesis of halting net additions, rising expenses and increased competition, Jeffries said. The bank has a neutral recommendation on the stock, with a target price of R$31.50.

Among blue chips, Petrobras’ common and preferred shares rose 0.90% and 0.43%, respectively. Vale ON fell by 0.14%, while bank stocks rose except for BB. Itau PN rose 0.40%, Bradesco PN rose 0.21% and BTG Pactual Unit rose 0.61%.

Karvelis, a native of Abin, noted that the House of Representatives has become cautious about Brazilian assets due to concerns about the country’s fiscal situation and the 2026 election scenario. He says whoever is elected president in 2027 will have to face a public budget deficit.

“It’s possible that Mr. Lula could get a fourth term if he makes a more market-friendly proposal, but I think it’s difficult to achieve. Either way, there will be a fiscal crisis, and someone will have to deal with it,” he said.

He therefore assesses that three scenarios are possible. The first is a change in the position of President Luiz Inacio Lula da Silva (PT), who will focus more on fiscal issues. The second is that the government does not implement structural reforms, and the third is a change of power, which Calvelis considers ideal.