Radar Perene / Archive / episode

The mood cooled; the appetite evaporated — August 2023

◦ 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

For three months, the Brazilian market told itself a joke that fell flat: confidence kept rising while the structure of the exchange refused to confirm it. In August, the bill came due — and not through the door anyone expected. The mood merely cooled, politely, and stopped halfway. The appetite for risk, that one evaporated entirely. The thermometer lost its fever; it was the foundation that came apart. In numbers: the Ânima Index retreated from 84.4 to 58.1, back to neutral; Perene Risk, which had entered the month at 85.4, closed at 0.0 — a stamped risk_off regime. Underneath, money stopped paying for optimism and went back to what was cheap: the ratio of real estate funds to the exchange, at one of the floors of the archive in July, recovered ground all at once, and commodities in reais gave back part of the excess.

What happened next

The zero did not last. In November 2023, three months later, the risk axis that had collapsed climbed back from 8.0 to 67.1, reoccupying the center, and the mood went further — Ânima crossed into stretched optimism, at 67.3. The euphoria August had buried reappeared, now buying cyclicals: the cyclicals crossed from behind to ahead of the defensives, while the IFIX sank against the index, far below its normal behavior. The pendulum did not stop there. In February 2024 the defensive premium, stretched to a point the archive almost never records, began to deflate. And in August 2024 the exchange became the most defensive of the year again — cyclicals at the bottom once more, the intermarket in heavy risk_off, 28.6.

What did not happen

August's 0.0 looked like a bottom. It was not — not in the sense of a decline that deepens. Anyone reading the stamped risk_off as the start of a collapse would have lost the way: three months later the appetite was back at the center and confidence was stretched once more. Nor did the defensive rotation August debuted become lasting leadership: the premium that recomposed itself was sold off again months ahead, and through August 2024 the cyclicals were still the most punished. The Selic, finally, did not yield in the scare — it held at 13.25% a year while the risk axis evaporated.

The honest verdict

The reading got the regime right: groundless euphoria collected its bill, and collected it from the base, not from the top of the mood. But Perene Risk's zero was not a direction; it was an instant. The extreme of an axis marks the end of an accumulated tension, rarely the end of a cycle. The market that dismantled the premium in August went back to building it in November — and to undoing it again afterward.

Continue reading: The euphoria without confirmation of June 2023 · Ânima vs. Perene Risk — mood against appetite · The shelter, not the applause (Sep 2023) →

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Characters: Mood