Radar Perene / Archive / episode

The money comes back in through the banks — and the door shuts within a quarter

◦ 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

Banks rarely throw a risk party open: they show up late and leave early. That is why it is worth recording the month they walked back in at the front of the line. After months in which internal leadership rotated between cyclicals and raw materials, a third name rose, and it came from below: the financial sector. The market went back to paying up for the engine of credit — the gearwork of the domestic cycle — and not at the expense of the cyclicals: the two offensive axes advanced side by side, in a broad front that usually sounds like structural health. The financials leapt from below the average straight to the top of relative strength — the largest single gesture in the structure that month — and the cyclical axis kept stretching. In numbers: the intermarket closed at 76.84 — strong appetite — and the Perene Risk Index rose from 44.5 to 62.4. Dollar at R$ 1.7187, Selic at 10.75%.

What happened next

The broad front did not age well. Three months later, in December, the banks had climbed even higher — before collapsing: the Financials/IBOV ratio gave back most of the advance, in the largest move of the month, and the cyclical axis crossed into negative territory. And yet the intermarket touched 100.0, the ceiling of the scale. The thermometer was rising while the command pieces changed hands — appetite had migrated to commodities. Six months out, in March 2011, the money was hunting for an outlet: utilities moved to the center of relative strength and the banks slipped below the average. Twelve months out, in September 2011, the defensive preference deepened and even the premium on commodities in reais dissolved. The engine of credit had left the stage.

What did not happen

The re-entry through the banks' door did not turn into a corridor. The broad front — financials and cyclicals rising together — looked like the most durable signal of all, and it was the most fleeting: the leadership came apart within a quarter. And the intermarket at the top, in December, did not confirm the banks' story: appetite did not evaporate, it simply switched fuel. Credit was not the theme of the year that followed; it was the theme of one quarter.

The honest verdict

The engine got the phenomenon right: the banking re-entry really was the largest gesture in the structure and the broadest appetite of the period. What it does not measure is permanence. A broad front describes the present, not the durability — and the fuel of risk changed every quarter: credit, then commodities, then utilities. The re-entry was real; the staying, not so.

Continue reading: The thermometer rises, the fire changes its fuel · The money hunts for an outlet, not a mine · The premium on raw materials dissolves →

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