Luzone Capital - CENÁRIO ECONÔMICO/ MAIO

ECONOMIC SCENARIO/ MAY - 2023 BY LUZONE CAPITAL

CENÁRIO ECONÔMICO/ MAIO - 2023 POR LUZONE CAPITAL

Depois da tempestade perfeita que ocorreu na economia no ano passado, provocada pela guerra na Ucrânia logo após dois anos de Covid19 ainda vemos o rescaldo da Covid e a adaptação a guerra que não parece ter horizonte de curto prazo para terminar. Os descompassos logísticos e de produção, o aumento das commodities e a crise de energia na Europa, consequências desta tempestade, geraram uma enorme perda do poder de compra na economia global, algo inédito para a atual geração.

Os investidores adorariam que 2022 não tivesse existido, o Indice Global MSCI que mede o desempenho de mais de 3.000 ações de mercados desenvolvidos e emergentes teve uma queda de pouco mais de 20%, acumulando uma perda recorde de US$ 18 trilhões. Na Europa, o Euro Stoxx recuou 11,7% no pior resultado desde 2018. Em Nova York, os principais índices registraram o pior ano desde 2008; o Dow Jones registrou queda de 9%, o S&P 500 caiu cerca de 20% e a Nasdaq perdeu 33% em 2022.

Iniciamos 2023 ainda preocupados com o comportamento da economia mas a boa notícia é que inflação parece estar no fim do ciclo inflacionário global dos últimos dois anos.

As principais causas parecem estar bem mais fracas, o comércio mundial já está mais estruturado resolvendo parte dos problemas de logística provocados pela pandemia, os ciclos de superestímulos na economia dos governos já diminuíram e o mundo já está aceitando melhor a longa duração da guerra da Rússia contra a Ucrânia.
A política monetária contracionista da maioria dos países deve realmente conter a inflação, o problema é que pode causar também recessão, principalmente em alguns países desenvolvidos.

Os preços das commodities devem se estabilizar mas possivelmente com valores mais altos que antes do início deste ciclo inflacionário.
Devemos ter menos inflação e menoscrescimento econômico mas por outro lado poderemos ter no segundo semestre deste ano o início de um ciclo de baixa nos juros da maioria dos países.

Outros problemas são o desemprego ainda alto em alguns países, o alto custo da energia na Europa em razão da guerra e os altos preços de produtos e serviços em razão da grande inflação mundial.

As altas taxas de juros chegaram ao consumidor final e estão parando algumas economias mundo afora e causando problemas a instituições financeiras como a quebra de dois bancos regionais nos EUA e a compra do Crédit Suisse pelo UBS. O problema dos bancos regionais nos EUA obrigou o FED (Banco Central Americano) a criar um programa de socorro aos bancos e este problema acarretou ainda um derretimento nos juros nos títulos de 2 anos nos EUA. A origem do problema está nas altas taxas de juros do FED, que em março aumentou a taxa pela nona vez.

O boom das empresas de tecnologia no Vale do Silício inflou os balanços dos bancos em 2021 e 2022 e estes bancos usaram parte dos recursos para investirem em títulos imobiliários e títulos públicos que tiveram grande perda com o aumento das taxas pelo FED. Interessante porque o SVB investia nos títulos mais seguros do mundo, os do Tesouro Americano, mas com a elevação rápida das taxas de juros nos EUA, os papeis antigos foram superados pelos novos papéis com juros maiores, com a crise de confiança no banco e a corrida para saques, o banco foi obrigado a vender os papeis antigos antes do prazo, com enorme prejuízo. A ultima crise no sistema bancário americano foi domada no início com a aquisição do First Republic pelo JPMorgan.

Já no Crédit Suisse, dois grandes problemas deixaram insustentável a situação do banco que já vinha brigando com escândalos nos últimos anos e, que levou o preço das suas ações a cair mais de 97% de 2008 até o início de 2023. Estes dois problemas também se originaram no mercado financeiro, a quebra da empresa financeira britânica Greensill e o escândalo do fundo multimercado americano Archegos Capital.

A grande expectativa agora é pela pausa do ciclo de alta nas taxas do FED esperadas para ainda este ano até em razão de todos estes problemas no mercado financeiro pois as altas taxas por muito tempo sufoca a economia, não deixando espaço para investimento uma vez que o crédito fica muito caro.

Os negócios que eram viáveis com juros zero, não são com juros a 4% ou a 5%, e ainda veremos outros problemas se estas altas taxas persistirem. O PIB do primeiro trimestre nos EUA desacelerou e cresceu 1,1% na taxa anualizada, o que representa um forte freio na economia que cresceu 2,6% no ultimo trimestre de 2022. Mesmo com tudo isso, há ainda a expectativa pelos analista que o FED eleve os juros em 0,25% nesta semana, o que deixa claro que a questão de taxa de juros não é para entendimento de amadores.

O Governo parece não entender que instabilidade econômica gera expectativa de inflação, pode gerar recessão e no final, penaliza principalmente os mais pobres, justamente aqueles com quem o Presidente se diz preocupado. Nesse sentido a birra do Presidente da República com o Presidente do Banco Central não ajuda em nada.

A grande questão neste ano será dos Banco Centrais mundo afora para escolher o momento exato para início da diminuição das taxas de juros, lembrando que alguns economistas criticaram a demora dos Bancos Centrais do países desenvolvidos no início da alta dos juros, aceitando mais inflação do que o necessário.

No Brasil o problema pode ser um pouco mais complicado por causa do início do novo governo e a incerteza econômica gerada. A falta de certeza sobre a seriedade e capacidade do novo regramento fiscal recém apresentado cumprir seus objetivos, o aumento dos gastos públicos com a PEC aprovada a toque de caixa e também a tentativa de interferência do Presidente na política de preços dos combustíveis, deixou o mercado preocupado com a autoridade do Ministro da Fazenda e com as reais intenções do Governo Federal na economia.

Embora tenhamos uma das maiores taxas de juros do mundo, foi louvável o trabalho do nosso Banco Central que atuou mais rapidamente que a maioria dos países e conseguiu domar a inflação, porém a tão aguardada diminuição na Taxa Selic só deve ocorrer a partir do segundo semestre deste ano em razão dos problemas apontados acima e pela expectativa de inflação que embora aparentemente domada, tem expectativa de alta. Há de se observar ainda que temos uma baixa taxa de poupança e temos uma dívida pública bem superior a observada nos países emergentes, o que limita o espaço para juros estruturalmente mais baixos.

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After the perfect storm that occurred in the economy last year, caused by the war in Ukraine just after two years of Covid19, we still see the aftermath of Covid and the adaptation to the war that does not seem to have a short-term horizon to end. The logistical and production mismatches, the increase in commodities and the energy crisis in Europe, consequences of this storm, generated a huge loss of purchasing power in the global economy, something unprecedented for the current generation.

Investors would love for 2022 not to exist, the MSCI Global Index, which measures the performance of more than 3,000 stocks from developed and emerging markets, has dropped just over 20%, accumulating a record loss of $18 trillion. In Europe, the Euro Stoxx retreated 11.7% in the worst result since 2018. In New York, the main indices registered the worst year since 2008; the Dow Jones is down 9%, the S&P 500 is down about 20% and the Nasdaq has lost 33% in 2022.

We start 2023 still worried about the behavior of the economy but the good news is that inflation seems to be at the end of the global inflationary cycle of the last two years.

The main causes seem to be much weaker, world trade is now more structured, solving part of the logistical problems caused by the pandemic, the cycles of overstimulation in the government economy have already diminished and the world is now accepting better the long duration of the Russian war against Ukraine.

The contractionary monetary policy of most countries should really contain inflation, the problem is that it can also cause recession, mainly in some developed countries. Commodity prices should stabilize but possibly with higher values than before the beginning of this inflationary cycle.

We should have less inflation and less economic growth, but on the other hand, in the second half of this year, we may have the beginning of a cycle of low interest rates in most countries.

The big question this year will be for Central Banks around the world to choose the exact moment to start lowering interest rates, remembering that some economists criticized the delay of Central Banks in developed countries in starting to raise interest rates, accepting more inflation than the necessary.

Other problems are the still high unemployment in some countries, the high cost of energy in Europe due to the war and the high prices of products and services due to the high world inflation.

High interest rates have reached the final consumer and are bringing to a halt some economies around the world and causing problems for financial institutions, such as the failure of two regional banks in the US and the purchase of Crédit Suisse by UBS. The problem of regional banks in the US forced the FED (American Central Bank) to create a bailout program for banks and this problem also led to a meltdown in interest rates on 2-year bonds in the US. The origin of the problem lies in the high interest rates of the Fed, which in March raised the rate for the ninth time. The boom of technology companies in Silicon Valley inflated bank balance sheets in 2021 and 2022 and these banks used part of the resources to invest in real estate securities and government bonds that suffered a large loss with the increase in rates by the Fed. Interesting because the SVB invested in the safest securities in the world, those of the American Treasury, but with the rapid rise in interest rates in the USA, the old securities were overcome by new securities with higher interest rates, with the crisis of confidence in the bank and the rush for withdrawals, the bank was forced to sell the old papers before the deadline, with huge losses. The latest crisis in the American banking system was initially tamed with the acquisition of First Republic by JPMorgan.

The great expectation now is for the pause in the cycle of hikes in the FED rates expected for later this year, even because of all these problems in the financial market since the high rates for a long time suffocate the economy, leaving no room for investment once the credit is very expensive.

Businesses that were viable at zero interest are not at 4% or 5% interest, and we will see further problems if these high rates persist. First-quarter GDP in the US slowed down and grew by 1.1% at the annualized rate, which represents a strong brake on the economy, which grew by 2.6% in the last quarter of 2022. Even with all this, there is still the expectation by analysts that the FED raises interest rates by 0.25% this week, which makes it clear that the interest rate issue is not for amateur understanding.

In Brazil, the problem can be a little more complicated due to the beginning of the new government and the economic uncertainty generated. The lack of certainty about the seriousness and ability of the newly presented new fiscal regulation to fulfill its objectives, the increase in public spending with the PEC approved at the drop of a hat and also the President`s attempt to interfere in the fuel price policy, left the market concerned with the authority of the Minister of Finance and with the real intentions of the Federal Government in the economy.

The Government does not seem to understand that economic instability generates expectations of inflation, can generate recession and, in the end, mainly penalizes the poorest, precisely those with whom the President says he is concerned. In this sense, the President of the Republic`s tantrum with the President of the Central Bank does not help at all.

Although we have one of the highest interest rates in the world, the work of our Central Bank was commendable, which acted faster than most countries and managed to tame inflation, however the long-awaited decrease in the Selic Rate should only occur from the second half of the year this year due to the problems mentioned above and the expectation of inflation which, although apparently tamed, is expected to increase. It should also be noted that we have a low savings rate and a public debt much higher than that observed in emerging countries, which limits the space for structurally lower interest rates.

The Inflation Rate stood at 5.79% in 2022, remaining above the target for the second consecutive year. IPCA expectations, according to the Central Bank`s Focus Report, were at 5.78% for 2023 at the beginning of February, rising to 5.90% at the beginning of March, 5.96% at the beginning of April and 6.05% today . In addition to the month-to-month increase this year, the IPCA forecast for next year also rose from 4.13% last month to 4.18% this month, that is, there is an expectation of an increase in inflation and, therefore, the BACEN maintains the Selic rate skyrocketing. And the interesting thing is that there is this expectation of an increase even with the forecast of deflation accumulated by the IGP-M in the last 12 months, because what defines the rate is the expectation of future inflation.

Still according to the Bacen Focus Report dated 04/28/2023, the GDP forecast for 2023 is at 1.00%, the dollar should close the year at R$ 5.20 and the Selic at 12.50%, already pricing slightly lower at the end of the year.
According to 2022 data from the IBGE and CNC, 77.9% of the Brazilian population was indebted and the default rate in November was 30.3%.

The financial market will spend the first half of the year closely observing the actions of the Federal Government, mainly with regard to the long-awaited Tax Reform and the approval of the New Fiscal Anchor, which requires further explanation since, in principle, it is very dependent on an increase in tax collection and according to analysts of the stature of Armirio Fraga, it is unsustainable.

The big problem for any government, and even more so for a government with an expansionist policy, is to cut spending and what would be the fastest way to resolve inflation expectations and its reflection, the interest rate, should not be seen here. The biggest concern will be to lower inflation expectations to make it possible to lower the Selic rate in the second half of the year, as, as in developed countries, high rates are causing problems on a scale that no one would like to see, as leveraged companies and individuals are having very difficult to roll over its onerous liabilities with the interest rate at this level. These recent problems in the balance sheets of companies and the fall in the shares of large companies are largely due to leverage and the high financing rates paid that are not sustainable in the long term.

In Brazil, in the first three months of this year alone, more than 40 companies had their credit ratings downgraded by the 3 most renowned companies in the sector: Fitch, Moody`s and Standard & Poor`s, this is more than all the downgrades last year.

The average free credit rate rose in April to 44.23% p.a. (Bacen), the highest rate since 2017; The consequence of this is the increase in the indebtedness of Brazilian families, which in January of this year stood at 48.8%.
All of these exposed data leave us reflecting on a complicated and apprehensive year regarding the government`s next steps and their impact on the economic scenario. Decreasing leverage is desirable for everyone and the big question will be how to do it, in a way that generates less impact on the companies` operations.
For the rest, we have some good news in the economy, our trade balance had a surplus of almost US$ 11 Billion in March and we have a projected balance of US$ 50 Billion for 2023 which will help us to pay the deficit of more than US$ 50 Billion designed for services. The current account deficit is practically zero, we have international reserves and a comfortable external debt compared to our GDP.