Turim Insights
A monthly conversation with our team about markets and strategies
The US elections, interest rate cuts in developed economies, and the deterioration of the economic situation in Brazil were some of the highlights of this month’s Turim Vision webinar.
On the international scene, the US elections are capturing the attention of the markets. Biden’s performance in the first debate raised concerns about his health and consequently his ability to remain in the presidential race. In this context, Trump emerged as the favorite according to the implied probabilities on betting sites.
Meanwhile, the Federal Reserve revised its projections for inflation and interest rates upward, implying a more challenging scenario for its first rate cut. On the other hand, other developed central banks took their first steps towards less contractionary rates, which, along with evolving economic data and political noise in Europe, helps explain the stronger performance of the DXY throughout June.
Meanwhile, the US stock market recorded another month of gains, mainly driven by technology companies. In this context, it is noteworthy that the Nasdaq (up 6.0% in June) rose significantly more than the S&P 500 (3.5%) and other global markets, represented by the MSCI ACWI (2.1%).
In Brazil, the situation remains complex, bringing negative implications for assets, especially exchange rates and interest rates. The main market concern is tied to the apparent lack of political will to make the necessary adjustments to comply with fiscal framework rules.
Meanwhile, the Central Bank took a tougher stance, halting its rate-cutting cycle in a unanimous vote and indicating a more challenging outlook, marked by a higher estimated neutral rate and more intense discussion regarding the balance of risks. Although the authority did not indicate the next steps in monetary policy, the market is already pricing in a rate hike cycle starting this year.
The webinar featured Ana Carolina Carvalho, Co-CEO of Turim, Fernando Verboonen, CIO of Turim, Rodrigo Louro, Head of Research at Turim, and Thiago Campos, economist at Turim.