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Capital came back buying shelter — May 2020

◦ Written under index methodology v1 (in effect until 15 Jul 2026). The current series is v2 — readings quoted here may differ from those shown today. See the methodology.

Episode

The extreme

Domestic fear stopped liquidating and began to convalesce. The mood on the exchange doubled in thirty days, and institutional flow, in risk-off since February, found neutral ground again for the first time that year. But the capital that came back did not buy growth — it bought the electricity bill. The month's largest dislocation was not in sentiment, but in the exchange's hierarchy: electric utilities, the most regulated and predictable sector in the index, was promoted to relative leadership in a single leap. The money wanted to be inside the market and, at the same time, as protected as possible. In numbers: Ânima from 16.0 to 32.4, the Perene Risk Index from 24.2 to 44.3 — and the utilities, starting from near their average, closed the month more than two deviations above it.

What happened next

The expensive shelter did not last. In August 2020, the utilities premium melted away entirely, back to below the average, without any sector claiming the empty chair. In November 2020, the abandonment deepened: the utilities sank to the opposite extreme while the three gauges — mood, flow and intermarket — stopped disagreeing and crossed together into appetite (Ânima from 28.6 to 64.3, Perene Risk from zero to 58.4). The capital that had entered crouched in May stood up over the second half of the year. By May 2021, the Perene Risk Index was already brushing the ceiling, at 94.3.

What didn't happen

May's defensive leadership was not the start of a regime — it was a temporary shelter. Anyone reading the utilities' leap as a new order on the exchange would have been wrong: three months later the premium had evaporated. And the month's caution did not prove costly either: the May 2020 episode matured its six-month horizon with a return of +25.6%, above the central band of comparable cases — and beyond what nearly all of them had delivered. The dollar, for its part, did not follow the exchange's relief: it closed May at R$ 5.6434, a third consecutive peak, a statistical anomaly.

Honest verdict

The reading captured the right texture — selective appetite, money inside the market and protected at the same time — but the episode's deterministic verdict was one of ambiguity, and with reason: the sample was shallow, eight cases, and the possible outcomes wide open. The outcome was favorable; the configuration allowed for quite different paths. The light left on while the safe shrank was not a contradiction to resolve within the month — it was the normal state of a central bank in emergency, with the Selic cut to 3.0% and the liquidity injection in critical reading.

Continue reading: The April 2020 turn · When the three clocks strike the same hour · The refuge premium — Utilities/IBOV →

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