The financial market in Brazil closes down for the second day in a row; Ibovespa (IBOV), B3's main index, falls below 100,000 points

The Ibovespa closed down today. The index closed the day at 99.056 points, but the drop during the day reached the level of 2%. However, at the end of the day, the index fell 1.2%.

The day on the Bovespa was marked by investors selling stocks and looking for safer assets. It was a flight to quality movement.

Global risk aversion, fearing a new economic recession, has forced the Brazilian Central Bank, for the first time since the 2009 crisis, to announce that it is going into cash to control the rise in the US currency. The Brazilian Central Bank has also announced that it will offer foreign exchange swap contracts.

Today, at an event promoted by BancoSantander in São Paulo, the Minister of Economy, Paulo Guedes, minimized global economic adversity. He said that he had no fear of being swallowed by the international market and that Brazil did not need Argentina to grow its economy.

In fact, the crisis in Argentina has affected and continues to affect the Brazilian economy. Guedes's phrase shows a mixture of arrogance and unpreparedness for the post of Minister of Economy.

The crisis in Argentina, Brazil's third-largest trading partner, affects everything from the Brazilian tourism industry to bus, beer and steel companies. To say that Brazil does not need Argentina is to ignore how the Brazilian economy works.

Norway paralyzes transfers of over R$ 130 million to the Amazon Fund

Norway follows Germany and freezes part of its funding to the Amazon fund. Both countries argue Brazil has violated the fund's terms. Bolsonaro told Merkel to use the 35 million euros to reforest Germany.

According to the Norwegian Minister of Climate and Environment, Ola Elvestuen, the European country will suspend the sending of about R $ 133 million that would be destined for the Amazon Fund. According to Elvestuen, Brazil is breaking the agreement to reduce deforestation.

The decision of the German and Norwegian governments came because the Brazilian government wanted to change the operation of the Fund and allocate resources to compensate landowners.

According to the Gazetaweb, the Amazon Fund, which has raised R $ 3 billion in grants, finances projects from states, municipalities and the private initiative for the sustainable development of the Legal Amazon. Norway and Germany together contribute over 90% of the total fund, which is managed by the National Bank for Economic and Social Development (BNDES).

Yesterday, after a very bad day in the Brazilian financial market, Bovespa (B3) starts today with a strong position adjustment movement; Goldman Sachs sees Brazil as a more "defensive" market

International financial markets yesterday showed strong turmoil in the face of the biggest fears of a global recession, after weak economic data in Germany and China mainly. This also happened in Brazil.

The Ibovespa, the main index of the Brazilian stock exchange, was affected: it fell by 2.94% to 100,258.01 points. The high of the US currency is the largest since March 27, reaching R$ 4.

Among the main casualties, Petrobras (BOV: PETR4) and Vale (BOV: VALE3) retreated above 2%. Kroton (BOV: KROT3) led declines by over 7% after the company's quarterly results were below expectations, according to Reuters.

Brazil should already be at the rate of stronger economic growth in order to face this scenario of a possible global recession. In fact, Brazilian families are not consuming because unemployment has risen. In addition, debt levels in Brazil are very high.

Despite these and several other negative indications about the Brazilian economy, Goldman Sachs said in a report that the bank is "more optimistic about the Brazilian stock market, followed by local exchange and interest rates and a little less positive about sovereign credit". 

After assessing the performance of Brazilian assets in recent weeks, which were particularly bad for emerging markets, Goldman Sachs assessed that Brazil is becoming a more “defensive” market. 

According to the bank, the contagion of the crisis in Argentina occurs more to a lesser degree, as a result of which Goldman Sachs believes that Brazil, which has resisted a scenario of slower global growth and problems in Argentina, should present assets with better performance than the other than your peers.

Brazilian President Jair Bolsonaro tells German Chancellor Angela Merkel to use the Amazon deforestation aid offered by the European country to reforest Germany

According to the broadcast político site, Brazilian President Jair Bolsonaro said German Chancellor Angela Merkel should "take the money" blocked for environmental preservation in Brazil and reforest Germany.

Over the weekend, the German government decided to suspend investments in Amazon Rainforest protection projects due to the high deforestation rates reported by Inpe and widely criticized by the Jair Bolsonaro government.

According to the broadcast político, Bolsonaro said that "I even wanted to send a message to dear lady Angela Merkel, who suspended 80 million reais (€35 million) for the Amazon. Take this money and reforest Germany, okay? It needs a lot more than here", he said during a conversation with journalists yesterday.

Following this, President Jair Bolsonaro said he does not need German money. A few days ago, German Environment Minister Svenja Schulze, who was directly responsible for canceling the money send, countered that the reaction shows that the German government is "doing exactly the right thing".

The defeat of Argentine president Mauricio Macri and his liberal agenda already affects the Brazilian economy; Jair Bolsonaro and Alberto Fernández exchange accusations

Argentine President Mauricio Macri was defeated by a large advantage in the country's primary elections by opposition candidate Alberto Fernández, whose deputy is former President Cristina Kirchner.

The advantage of Fernández's bid scared the financial markets. The candidate's unorthodox economic agenda is not accepted by the financial market.

The problem is that Macri's orthodox and reformist economic agenda has not brought the expected growth, but the country has worsened in many ways. When he was elected, Macri promised to end poverty, but it increased during his rule. He said he would run a liberal bias government, but ended up freezing prices for more than 60 products.

After 4 years, the population did not feel life improve with Macri. Many say it got worse. The answer, at the ballot box, is the return of Cristina Kirchner, Fernández's vice president.

The result has caused the Argentine stock market to plummet 48% (the biggest global loss on a stock exchange in one day in the last 70 years, according to Bloomberg), and the dollar has risen 30% to 58.85 pesos and was also felt in Brazil, which registered a drop of 2% in Ibovespa and dollar to $ 4. Argentina is an important market buyer of Brazilian goods - were $ 15 billion in exports last year alone.

Brazilian exports to Argentina have already shrunk by 40% in the first seven months of 2019.

The change could also affect the Brazilian market as Macri is a strategic ally of the country in negotiations for a deal between Mercosur and the European Union. President Jair Bolsonaro went public with open criticism of candidate Alberto Fernández, who responded in the same tone by calling Bolsonaro "racist, misogynist and violent."

Day in Brazil is marked by manifestations against the Pension Reform, education cuts and environmental policies of president Bolsonaro government; on Twitter, protesters are calling the movement #Tsunami13Agosto

Brasilia, the federal capital of Brazil, dawned with protests from indigenous people, servants, students, and teachers. Many of these protests are against Social Security Reform, cuts in education spending and the environmental policy of Jair Bolsonaro's government.

Protests and demonstrations also take place in other cities and regions of the country. In the North and Northeast, students took to the streets to criticize the federal government's educational policy and cuts in education spending.

On Twitter, the movement generated the hashtag #Tsunami13Agosto, which is one of the most talked-about topics of the day in Brazil.

Ministry of Health building in Brasilia is occupied by a group of Indigenous women

A group of about 1500 indigenous women occupied the building of the Special Secretariat of Indigenous Health (Sesai) of the Ministry of Health in Brasilia late yesterday afternoon. They are against the municipalization of indigenous health and against the decision of the Minister of Health, Luiz Henrique Mandetta, which determined the extinction of Sesai.

According to indigenous leader Sônia Guajajara, "they put an indigenous secretary in the briefcase to say that the Indigenous are represented, but she has no commitment to our people. We want to strengthen special health and subsystems. In addition, we are against legalizing deforestation. We will not accept the genocidal policy of the Bolsonaro government. We are not obliged to accept any destruction of our rights. "

BTG Pactual (BPAC11) shows a profit of R$ 1 billion in first-quarter 2019

On the balance sheet presented today, Banco BTG Pactual posted a profit of R$ 1 billion in the second quarter of 2019, up 50.2% over the same period in 2018, when it posted a profit of R$ 685 million.

According to the website Poder360, "the company's net operating revenue totaled R$ 2.2 billion, up 76.2% from R $ 1.2 billion in the second quarter of 2018. Adjusted earnings per share were R$ 1.18 and the annualized return on average equity reached 20.6% in the quarter."

Banco Inter (BIDI4) presents a 90.9% increase in net income in the second quarter of 2019

Banco Inter, a Belo Horizonte-based financial institution and one of the first digital banks in Brazil, posted a 90.9% increase in net income in the quarter over the same period last year to R $ 32.9 million.

Return on equity was 13.7%, 3.2 percentage points higher than in the second quarter of 2018.

The bank's total assets were R$ 6.754 billion, up 45.7% over the same period last year, and the expanded loan portfolio stood at R$ 3.963 billion, up 37.2% over the second quarter of last year.

Brazil enters in "technical recession" after disclosure of preview of the first quarter of 2019 GDP made today by the Brazilian Central Bank

The Brazilian economy registered a retraction of 0.13% in the second quarter of 2019, according to the Economic Activity Index (IBC-Br) released by the Brazilian Central Bank today. This puts the country in a "technical recession" framework "when you have two quarters in a row of economic contraction i.e. our economy shrinks and things go south."

This index is a preview of GDP, which will be released on August 29 by the Central Bank. The 0.13% decline reported today occurred between April and June 2019 compared to the first quarter of the same year.

The Brazilian Minister of Economy, Paulo Guedes, said today at an event held at the Superior Court of Justice (STJ) that it is not possible to blame the current government for the economic performance of the country.

According to the newspaper Correio Braziliense, Guedes said that "It is still a short time for the government with liberal policies in the economy to present results."

Macri's defeat in regional election in Argentina surprises the Brazilian financial market; currency market reacts by devaluing the Argentine peso

The Front of All slogan, formed by Alberto Fernández and former President Cristina Kirchner, imposed a severe defeat on Argentine President Mauricio Macri in the primary elections held yesterday. Macri lost by a difference of 18 percentage points. In Buenos Aires, the country's largest electoral stronghold, the victory of Kirchnerist Alex Kicillof in the race for the office of governor points to a possible defeat by Macri in the October 27 general election.

A possible government with Cristina Kirchner as vice president will probably distance politically the Argentinians from Brazil. Argentina is Brazil's largest trading partner, but after President Jair Bolsonaro has publicly supported Macri's reelection and criticized Kirchnerist presidential candidate Alberto Fernández, who visited former President Lula in prison, the relations between the two countries will surely suffer a severe blow whit a Fernández and Kirchner victory.

Under Macri (2015-currently), the Argentine economy has not taken off. Inflation remains high (55% accumulated in 12 months) and the peso (Argentine currency) is strongly devaluated against the dollar. The tendency now is for this devaluation to be stronger due to the financial market fears of a possible Fernández victory.

Today, the first reaction of the markets was falling bonds and shares with falls of up to 35% in the price prior to opening. The shares of the Argentine companies collapsed about 20% in premarket of the New York Stock Exchange. The dollar is being sold between 49 and 51 Argentinian pesos.