Turim Insights

The latest readings on inflation and activity in major economies and recent communications from central banks were some of the highlights of this month’s Visão Turim webinar.

The U.S. GDP came in well below expectations in the first quarter of the year, but its composition still shows signs of robust growth despite negative surprises in net exports, government spending, and inventory formation.

At the same time, inflation as measured by the PCE surprised during the quarter, which caused some discomfort among the members of the Federal Reserve’s monetary policy committee (FOMC). Despite this, the committee seems quite reluctant to consider raising interest rates again.

In the Eurozone, on the other hand, the disinflation process appears to show more significant signs of progress, which may allow for interest rate cuts around mid-year.

In the markets, it is worth noting that the first-quarter results of companies listed on the American stock exchange were positive, slightly exceeding expectations.

“The increase in Capex by Big Techs in Artificial Intelligence was especially positive for the semiconductor sector. Around 35% to 50% of Big Tech investments are dedicated solely to AI, and the trend is growing,” explained Pedro Hokama, Head of Liquid Assets at Turim.

In Brazil, the increase in uncertainty about the scenario led to the withdrawal of the future prescription of monetary policy, causing the market to converge to a pricing of interest rate cuts lower than what had been indicated by the COPOM (Central Bank Monetary Policy Committee).

The local stock market also suffered, recording the worst first quarter since the pandemic, amid an outflow of foreign investments from the stock market amounting to 34 billion reais.

The webinar also featured Leonardo Martins Moraes Martins, Co-CEO, Nelson Abrahao, partner and strategist, and Henrique Santos, CFA, partner and Portfolio Manager.