By Jeffrey Smith and Anna Beatriz Bartolo
Investing.com – Congress is mobilized to advance the PEC dos Precatórios, while the Senate’s IR reform decision criticizes the chamber-approved text. The claims of insider trading do not reach the top. US stocks expected to open higher as swing season extends: Johnson & Johnson (NYSE :), Procter & Gamble (NYSE 🙂 (SA 🙂 and Netflix Inc (NASDAQ 🙂 (SA :)) are due to release results. Europe’s energy crunch is easing as winds start to fall and some mild weather forecasts curb demand, but the energy market remains tight as OPEC struggles to raise production.
Here’s what you need to know about the financial markets on Tuesday, October 19.
1. Adjustment in government accounts
Brasilia is still busy with project negotiations to amend the federal budget in Congress in order to obtain funds for Auxílio Brasil, the new Bolsa Família. Today, the 19th, the Precatório’s Constitutional Amendment Proposal (PEC) must be voted on by the Special Committee. If approved, the government will pay R$39 billion in 2022 and defer R$51 billion.
Meanwhile, the rapporteur for income tax reform, Senator Angelo Coronel (PSD-BA), has said he should remove taxation and dividends from the text, he lives at the Center for Study of Law Firms (Cesa). Coronel also requested more information from the economic team to see the true implications of extending the income tax exemption to individuals.
The senator criticized the current text and declared that he would not rush to present a report that would reassure the market even if it took years to complete it. On the idea of simplifying the view so that reform creates room in the budget for an income program to replace emergency aid, the colonel stated that he will not succumb to government pressure.
2. Powell’s Trade Discoveries Affect Renaming Horizons
A boss sold between $1 million and $5 million in stock from his personal portfolio in October of last year, just a day before the market plunged.
American Prospect, which first broke the news, has framed Powell’s move as a result of the Trump administration’s refusal to call for more fiscal stimulus as the economy slows amid a wave of COVID-19 infections. The Federal Reserve has not commented on the story, but other news agency reports have said Powell’s actions are in line with official guidelines on negotiations.
The allegations come at a bad time for Powell as he struggles to win a second term at the central bank against increasingly tough resistance from the progressive wing of the Democratic Party led by Senator Elizabeth Warren.
Powell just ousted two regional Fed chairs, after revealing that they were actively trading in the market in 2020. The vice president, whose term ends in January, also actively traded on the eve of Powell’s speech in October.
3. Stocks in the US market
US stocks are expected to open higher on a day marked by corporate earnings and central bank speeches.
At 8:16 am, futures contracts are up 0.51%, while futures and 100 are up 0.49% and 0.35%, respectively.
Johnson & Johnson, Procter & Gamble, Philip Morris (NYSE:) and Travelers (NYSE:) report earnings before opening, while Netflix takes charge of the account after closing, with actions supporting and.
Data from and to September is the only noticeable economic data, with the latter expected to decline after two strong summer months.
4. The winds of change light up Europe
Wind has returned to Europe, bringing down wholesale energy and gas prices, which are still well above sustainable levels. Record first-month gas futures in the Netherlands slipped to just over €90 per megawatt-hour, down about 40% from last week’s peak. Next-day base loading rates in Germany are down more than 50% to €64.50/MWh.
Wind generation in the UK and Germany, Europe’s two largest sources of wind energy, is expected to reach an all-time high this week, while warmer-than-expected temperatures will keep heating demand limited.
Forecasts reported by The Weather Co. say the hot weather will likely continue into November, giving traders and industrial customers some time to breathe as they struggle to meet fuel needs.
5. Strong oil before API data
However, oil prices regained momentum to test seven-year highs hit on Monday, amid persistent concerns that OPEC simply won’t be able to ramp up production as planned.
Nigeria and Angola produced less than their share again last month, according to reports by various news agencies, and Saudi Arabia has not bridged the gap, aware of the abysmal struggle it had with the UAE over market share at the OPEC+ meeting last month.
Oil prices have now reached a level where the production system by major exporters used to collapse in the past. US crude oil prices rose 1.16% to $82.64 a barrel, while US crude futures rose 0.79% to $84.98 a barrel. API report at 4:30 pm as usual.