Stocks are trading higher ahead of the Fed announcement.
The Bovespa opened higher, fell, then rose again and moments ago was trading at breakeven; the stock market is rising, buoyed by the start of the Fed's two-day meeting.
247 - The Bovespa opened higher, fell, rose again, and was recently trading at breakeven. The best way to describe it is that the market will remain highly volatile, without a clear direction, following the international market, with the behavior of the New York Stock Exchange predominating. The fact is that, in a scenario with these characteristics, there are many opinions that the market has overreacted and that there are buying opportunities in the Brazilian stock market. In recent days, with the rise of the dollar, the focus has been on large exporters. The main expectation continues to be the Fed meeting, which begins today and ends tomorrow.
PRE-OPENING - The stock market gave a break from the bad news and rose buoyed by the start of the two-day meeting of the Federal Reserve, the US central bank. The expectation is that tomorrow, the Fed will announce an operation to extend the maturities of bonds called a "twist," which will mean, in practice, an injection of liquidity into the market that could pull the US out of economic stagnation.
This boost in the world's largest economy, coupled with President Obama's job creation and tax revenue-boosting package, could generate renewed expectations in the markets. The US is the hope for a change in the global crisis scenario, given the lethargy bordering on negligence of the Eurozone governments, which are doing nothing concrete to resolve the region's sovereign debt problem.
Yesterday, Standard & Poor's downgraded Italy's debt. Contrary to the negative reaction, Asian stock markets closed higher, with Hong Kong rising 0,5% and Shanghai advancing 0,4%. Seoul climbed 1%. The Tokyo Stock Exchange fell 1,6%, but it was a session of updating the global market movement on Monday, when Japan was closed for a local holiday.
In Europe, stock markets opened the day down, pressured by the unresolved Greek debt saga and Italy's downgrade. But they gradually recovered and turned positive, with markets boosted by the Fed factor. London rose 1,5%, Frankfurt advanced 2,2%, and Paris jumped 1,2%.
The trend for today and tomorrow should be to confirm this recovery in stock prices. In Brazil, the scenario is identical. Besides the Fed factor, there is another, even more fundamental one. The recent rise in the dollar should favor large Brazilian exporters. It's good to keep an eye on these companies; despite the reduction in global economic activity, the devaluation of the real is good news for them.