The negative signal prevailed on the São Paulo stock exchange this Wednesday, amid the rise in US Treasury bond yields following Donald Trump’s victory in the United States presidential election.
A battery of corporate results also occupied the spotlight, with Gerdau among the positive highlights, with an increase of 6.2% after the balance sheet and dividend announcement, while GPA lost 4.69%, with quarterly performance also on the radar.
Investors remain in anticipation of the fiscal package, with Finance Minister Fernando Haddad stating that the round of meetings with ministers on the measures is complete. Investors are also awaiting the Central Bank’s interest rate decision at the end of the day.
At around 10:30 am, the Ibovespa, a reference for the Brazilian stock market, fell 1.1%, to 129,228.51 points.
Despite the reduction in uncertainty with the electoral outcome in the world’s largest economy, the view that Trump’s policies are potentially inflationary raised Treasury yields, which tends to undermine emerging market assets.
READ MORE: Dollar ‘headed for six’ with Trump’s election; US stock markets also soar
In New York, the yield on the 10-year US Treasury bond reached 4.4452%, from 4.288% the day before, but the S&P 500 future rose more than 2%.
According to manager Oliver Blackbourn of Janus Henderson, the movement in US Treasury bonds is due to the continued evolution of interest rate expectations and the potential for rising inflation.
He also noted in an emailed comment that the rise in U.S. stock futures is not surprising given indications that Republicans will try to maintain existing tax cuts and do more.
