Fearing the Fed Brazil Stocks Decline

Brazilian equities continued downward deepening its already-steep declines this week. Investors in Brazil will be closely watching today’s release of the U.S. employment report for December, which may shed some light on the degree of potentially aggressive U.S. monetary policy tightening.

Brazil’s benchmark Bovespa Index dropped 324.87 points, or 1.32%. Brazilian shares deepened their losses, amid ongoing profit taking and forecasts that U.S. interest rates might increase faster that previously anticipated.


Brazilian analysts interpreted the minutes from the U.S. Federal Reserve’s December meeting as a precursor to further interest rate hikes, which could draw foreign investment away from Brazil.


In earnings news, electric power utility Cemig reported a preliminary 2004 net profit that rose to 1.49 billion reais from 1.19 billion reais in 2003. The stock nevertheless tumbled.


Turning to research notes, two major investment houses raised their price targets on low-cost Brazilian airline Gol. The first upped its 12-month price target by around 20% from current levels to US$35, noting the carrier “still has some of the best growth prospects of any airline in our coverage universe.”


The other raises its target to US$36. Both investment houses rate Gol at “overweight/buy.”


Also, an influential brokerage initiated coverage on Brazil’s No. 2 steelmaker Belgo-Mineira at “peer perform,” due to the firm’s “robust fundamentals” and high margins.


The analyst said in its research note that a possible merger between Belgo and three other Brazilian subsidiaries of global steel giant Arcelor is also presenting a revaluation opportunity on the stock.


Thomson Financial Corporate Group
www.thomsonfinancial.com


PRNewswire

Tags:

  • Show Comments (0)

Your email address will not be published. Required fields are marked *

comment *

  • name *

  • email *

  • website *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Ads

You May Also Like

Brazil United Against NY Times

Allies and foes of Brazilian President Luiz Inácio Lula da Silva were unanimous in ...

A Brazil-Argentina Pact Against Fiscal Evasion

Brazil and Argentina signed, last week, an agreement to intensify the exchange of taxes ...

Brazil Sees Biotecnology as Panacea for Economic and Ecological Ills

The biotechnology development policy, launched on Thursday, February 8, by Brazilian President Luiz Inácio ...

Together with Cuba and China, Brazil Owes Billions to Paris Club

The Paris Club of creditor nations disclosed this week for the first time ever ...

Despite Record Beef Exports Brazilian Cattle Ranchers Can’t Make a Profit

For the third consecutive year, Brazilian cattle ranchers had a loss of revenue, in ...

Brazilian UN Envoy Killed in Iraq Gets a Bronze Bust in Geneva

Sérgio Vieira de Mello, a Brazilian ambassador to the UN who was killed four ...

In Contrast to China, Which Sells Commodities, Brazil Offers Fashion

Adding value to shoes and working with medium and high end products is one ...

Wilderness and Warmth

The boy brings the beverage, the glasses and soon after, in a little plate, ...

Brazilian first astronaut aboard the Soyuz space capsule

Brazil’s First Astronaut Is in Orbit

Brazil’s first astronaut, Air Force Lt. Col. Márcio Pontes, and two other astronauts, an ...

Songs That Won’t Die

While bossa nova is used as a watershed, A Canção no Tempo (The Song ...