Turim’s Insights

In our last monthly webinar of the year, our partners explained that November was highlighted by contrasting scenarios. If, on one hand, we had an increase in the number of Covid cases in the US, on the other hand, we saw a drop in cases in Europe and positive information about the effectiveness of vaccines from companies like Moderna and Pfizer.

After the US elections, there was a strong recovery movement in emerging stock markets (with the exception of China). The highlight was for Brazil, whose main index rose around 15% in the month.

“This increase was also driven by the appreciation of our currency – a scenario that boosted a record return of foreigh inflow”, explains Leonardo Martins Moraes, partner and CIO at Turim MFO. However, he points out that, despite the increase in the month, it is not yet possible to assume the return of foreign capital as a structural movement.

“With Trump’s departure, tensions created by the trade war and a more erratic US policy with emerging countries decreased. Thus, investors now have a predisposition to take more risks in relation to these countries. But for this movement to be more structural, Brazil needs to solve one of its main risks – fiscal”, he concludes.