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The month capital bought predictability — July 2024

Episode

The extreme

When confidence in the broader plot wavers but no one wants to leave the stage, money does not flee — it picks the most boring corner of the room and settles in. July 2024 was that gesture. Beneath an index that barely moved, domestic capital carried out a reordering by degree of predictability: it rewarded power utilities, sanitation and concessions — contracted, inflation-indexed revenue that does not depend on the mood of the cycle — and abandoned whatever lives on credit and appetite. In numbers: the Utilities/IBOV ratio went from the center of the distribution to the top (z from −0.06 to +1.98), while Financials/IBOV fell to −1.14 and real estate funds to −1.26. The trigger lit up at the turn of the month: the fiscal-stress derivative marked z of +3.21, a reading of three and a half deviations rarely seen. And there was a telling mismatch — the Perene Risk Index recovered from 37.9 to 52.9, back to neutral, but Ânima stayed at the bottom. People were buying, but with a guarded hand. Selic at 10.5%, dollar at R$5.54, debt-to-GDP at 77.21%.

What happened next

The shelter chosen had no fixed address. By October, the utilities had lost their post: commodities in reais jumped to the top (z from 0.28 to 1.09), in the shadow of a dollar at R$5.62, and the cyclicals stopped taking a beating. In January 2025 the lead changed hands again — and it went to the very banks that July had punished: Financials/IBOV rose from −1.08 to +0.84, the largest move on the grid, with mood firing from 41.6 to 66.5. The premium on predictability moved rooms every quarter.

What did not happen

The leadership of the utilities did not turn into a lasting preference — within three months it had already ceded the throne. And the banks beaten down in July did not keep sinking: by January they were leading. The defensive instinct was permanent; the address was not. Nor did the regime give in: the domestic score went from 34.1 in July to 29.5 in January, defensive throughout. In July 2025, after a long detour through euphoria, the axes converged — on defense.

The honest verdict

July left a question hanging: a durable preference for predictability, or a temporary shelter while the fiscal dust had yet to settle? The answer was the second. Honest to note: the engine classified this month's matured horizon as an insufficient reading, with a return of −1.2% over six months. It read the regime — not which room the capital would settle in next.

Continue reading: The premium of refuge — utilities against the IBOV · The currency that ran 2024 · Cyclicals against defensives, who leads each regime →

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Characters: Structure (intermarket) · Flow (risk appetite) · Mood · Dollar