Turim Insights
A monthly conversation with our team about markets and strategies
The job market surprises, discussions about the beginning of the interest rate cut cycle, and the U.S. elections were some of the topics addressed in this month’s Turim Insights webinar.
The latest numbers show a still very resilient job market, but with favorable surprises regarding productivity gains. One of highlights was the Non-Farm Payroll, which showed strong job creation and significant wage growth in January. However, this second metric seems to have been affected by distortions related to the reduction of working hours in the month due to weather events.
The latest meeting of the FOMC (Federal Open Market Committee) brought a series of more “dovish” signals but also ruled out the possibility of an early start to the rate-cut cycle. Prices in the market quickly to Federal Reserve President Jerome Powell’s statement that he does not believe the committee will have enough confidence in the disinflation process to start the rate-cut cycle in the March meeting.
As for the U.S. presidential elections, the most likely outcome seems to be a contest between the current President Joe Biden, representing the Democratic Party, and former President Donald Trump, who, as expected, is leading in the Republican Party primaries. It is expected that the competition between the two candidates will become increasingly relevant to the markets as the year progresses.
In Brazil, inflation numbers are causing discomfort again due to a poor composition. The main negative point is the pressure on underlying services, which exceeded market expectations at the end of last year. Despite this, recent communication from COPOM (Brazil’s Central Bank Monetary Policy Committee) did not bring relevant changes to the prospective scenario, even after two directors being replaced.
In this context, the main U.S. stock indices had a positive performance in January, but still concentrated in a few names. On the other hand, many other global stock exchanges, including the Ibovespa, declined in the month.
The webinar featured Leonardo Martins Moraes, Co-CEO of Turim, Henrique Santos, partner and Portfolio Manager of Turim, Thiago Campos, economist at Turim, and Lucas Panaro, Head of Hedge Funds at Turim.