The April 2020 turn: cyclicals return to a table that held only defensives

Derivative

The extreme

After the March panic, April 2020 brought the first sign of a turn — but in only one place. Domestic mood left the absolute floor of the scale without leaving extreme pessimism, while inside the equity market the cyclical sectors were readmitted where only defensives had reigned. It was composition changing ahead of spirit. In numbers: Ânima from 2.6 to 16.0, risk appetite still contained (from 10.6 to 24.2), and the dollar climbing to R$ 5.33.

What happened next

The readmission of cyclicals was early, but real. By June 2020, risk appetite was already back near the top (99.9) and the structure had normalized. And in November 2020 mood finally caught up with the rest: Ânima jumped to 64.3, the largest advance in the series. What April only hinted at — the recomposition from within — was confirmed over the following months.

What didn't happen

April was not the complete turn. Anyone reading the readmission of cyclicals as "it's over, recovery confirmed" would have been ahead on two of the three axes: mood still marked deep pessimism (16) and the dollar did not reverse — it kept climbing (R$ 5.33). The composition of the equity market turned first; spirit and the exchange rate did not.

Honest verdict

The turn began with internal composition, not with confidence. Cyclicals returned to the table while mood still sat in the dark — internal composition turns before mood acknowledges it.

Continue the story: What happened after fear priced everything · When the three clocks aligned (Nov 2020) · Cyclicals × defensives →

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Characters: Structure (intermarket) · Mood · Cyclicals × defensives