After the stock market had its biggest fall in history on Monday (8), the Brazilian market reacted on Tuesday, recovering. The Ibovespa, the main index of the Brazilian stock market, closed up 7,14%aos 92,214.47 points. Its biggest daily appreciation since 2009.
Vale shares stood out, jumping another 18%. Petrobras also bounced back after falling nearly 30% the previous day. The dollar fell to R$ 4.64.
In the United States, President Donald Trump promised, in addition to a payroll tax cut, financial aid for those with hourly employment contracts. These measures are intended to assist workers affected by the coronavirus and generate economic stimulus, in addition to incentives for the tourism industry.
The Ibovespa index reflected the economic stimulus proposals and closed at its highest level in eleven years this Tuesday (10). Since this morning, the stock market has already shown recovery after the great tension in the markets the day before. Investors were also encouraged by the news that the Russian Energy Minister had called a meeting to discuss cooperation with the Organization of the Petroleum Exporting Countries (OPEC).
After yesterday's plunge, oil is recovering. The price of Brent crude—used as a benchmark by Petrobras—is up 9.98% at US$$ (37.79), while the price of WTI is up 11.47% at US$$ (34.72).
The Ibovespa index rose 7,14% to 92,214 points, with a trading volume of R$39.992 billion. It was the highest gain since January 2, 2009, when the stock market rose 7,17%.
Dollar fell on the day
The commercial dollar fell 1.69% to R$ 4.6444 for buying and R$ 4.6457 for selling, its biggest drop since September last year. The April dollar futures contract fell 1.57% to R$ 4.659.
In the interest rate futures market, the DI for January 2022 fell 11 basis points to 4.52%, while the DI for January 2023 fell 18 basis points to 5.20% and the DI for January 2025 fell 20 basis points to 6.20%.
Situation in China
In China today, President Xi Jinping visited the city of Wuhan, the epicenter of the coronavirus outbreak that broke out on January 22nd. Xi's visit benefited Asian stock markets, which closed higher. The country announced an improvement in the situation, with only 19 new infections, the lowest number since January 18th. This contrasts with the progressive expansion occurring in Italy.
In Japan, the government assured that fiscal stimulus measures are on the way, which calmed investors.
In Brazil, among the indicators, industrial production advanced 0.9% compared to December 2019 (seasonally adjusted series), interrupting two consecutive months of negative rates, which accumulated a decline of 2.4%, according to data presented by the Brazilian Institute of Geography and Statistics (IBGE).
Economists consulted by Bloomberg expect a positive change of 0.6% on a monthly basis.
United States Politics
The United States Democratic Party held primaries today in six states: Michigan, Missouri, Washington, Idaho, Mississippi and North Dakota.
Former vice president Joe Biden is the favorite in Michigan, where he enjoys the support of African-Americans and the college-educated middle class, while Senator Bernie Sanders is favored by younger voters. Sanders, who lost on Super Tuesday, needs to win at least Michigan, which has 125 delegates, to regain the race.
Corporate news
São Paulo-based construction company Helbor announced it will issue simple debentures to raise R$1.47 million. Petrobras announced the sale of four natural gas fields in the interior of Bahia to Eagle Petróleo e Gás for R$1.01 million. CPFL – Companhia Paulista de Força e Luz (Paulista Power and Light Company) and Direcional Engenharia (Direcional Engenharia) published earnings reports last night.