Good morning! Today, we talk about the terrible day in the stock market. First environmental moves by the new government. And the expectations on Lula.
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Investors still frown upon new government
With some of the main stock exchanges abroad closed due to an extension of the New Year holiday, there was expected to be a lower volume of transactions in the Brazilian stock market. But Monday’s rout shows how markets continue to mistrust the newly-inaugurated administration.
Sour mood. Investors didn’t like a Day-1 move by President Luiz Inácio Lula da Silva to remove several state-controlled companies from a privatization program — including oil and gas giant Petrobras, Brazil’s postal service (Correios), data-processing service Dataprev, and warehouses owned by the National Supply Company (Conab).
- Some of Lula’s inaugural remarks also rubbed markets up the wrong way. Before a joint session of Congress, Lula called the federal spending cap a “stupid” instrument and pledged to revoke it.
- Created in 2016 through a constitutional amendment, the cap only allows the government to raise its...