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September 2021: Brazilian mood collapsed from 43.8 to 9.4 — and capital ran for cover at home

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The extreme

Domestic mood did not just give way — it caved in. In September 2021, Brazilian investor sentiment crossed out of the lower third, where it had already been beaten down, straight to the bottom of the scale: deep despair, with no recent parallel in this record. In numbers: the Ânima index fell from 43.8 to 9.4, the Perene risk axis followed from 21.8 to 13.1, and the intermarket grid pulled back from 44.8 to 37.47.

But the fear had a geography. As mood crumbled, two sector ratios jumped together: commodities priced in reais against the IBOV leapt from 0.12 to 1.53 of deviation, and utilities, from -0.40 to 0.95. The backdrop: Selic at 6.25% a year, monthly IPCA of 1.16%, the dollar at R$5.28. Capital did not flee the country — it fled into real and contracted assets, inside the stock market itself.

What happened next

The defensive shelter kept filling up. In December 2021, with the Selic already at 9.25% and the dollar at R$5.65, utilities stretched from 0.90 to 1.67 of deviation and real estate funds (IFIX/IBOV) rose from 1.08 to 1.74 — while the banks deserted (Financials/IBOV fell from 0.76 to -0.36). In March 2022, with the Selic at 11.75%, utilities pinned 1.97, the highest point on the entire grid.

The currency refuge, that one withered. With the real at its strongest in months (the dollar at R$4.97 in March), commodities in reais pulled back from 0.98 to 0.07 — arithmetic of exchange rates, not of conviction. In September 2022, with the Selic locked at 13.75%, utilities went on being "the refuge that never gave up its premium," rising from 1.29 to 1.47.

What did not happen

The panic of Ânima at 9.4 did not foresee a tumble. Six months later, the September 2021 configuration matured with a realized return of +7.1% — the market rose despite the extreme despair. And the flight was not out of the country: it was inward, into utilities and real assets. Anyone who read the mood index as a sell trigger got the direction wrong.

The honest verdict

Half right: the geography of fear was correct — utilities went on earning a premium through March 2022 — but the record despair did not predict a decline; the index rose 7.1%. The engine itself classified September 2021 as an insufficient reading.

Continue reading: The house in the dark — 2022 →

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Characters: Mood · Structure (intermarket) · Commodities · Dollar · Rates (Selic)