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The room the enthusiasm chose — April 2021

Episode

The extreme

There was no drama; there was a change of address within the same house. The Radar's two domestic gauges pointed in opposite directions, and it was in that contradiction that the month resided: the most nervous axis pulled back from the ceiling while the underlying mood, numbed for months, finally woke up. The money, on top of that, went back to preferring what breathes with the economy. In numbers: the Perene Risk Index fell from 94.2 to 55.9, leaving behind a level glued to the ceiling; Ânima rose from 50.1 to 63.6, the most optimistic point for mood in the year; and the Cyclical/Non-Cyclical ratio went from practically zero (z 0.03) to 0.41. Selic at 2.75%, IPCA of 0.31%, dollar at R$ 5.56.

What happened next

The preference for the cyclical seemed like the beginning of something. It was not. In July, the risk axis hit the floor — from 31.3 to 0.0 — and the shelter that usually takes the most punishment in a sell-off, real estate income, was the one that suffered least (IFIX/IBOV recovered half a deviation). In October, the reversal completed itself: the Cyclical/Non-Cyclical ratio collapsed to a z of −2.70, nearly two deviations below, while commodities in reais rose to 2.95 over the IBOV. The room that April had chosen — the cyclicals' — was abandoned in a hurry. In April 2022, the arc closed: defensives returned to the top, with real estate funds crossing over to the positive side (z 0.94) and utilities at 2.51.

What did not happen

April's contradiction did not resolve through the optimistic side. Ânima, which had woken up cheerful, did not pull the risk axis up — three months later the two were descending together, no quarrel. And the cyclical preference that the month logged as a possible consolidation did not consolidate: it turned into its opposite before year's end. A fall from the ceiling was also not an immediate collapse — the Perene Risk Index took until July to reach zero. Nothing in April caved in; everything merely changed place, more slowly than the reading suggested.

The honest verdict

April's reading got the spirit right and the direction wrong. The enthusiasm did indeed not leave the building — but the room it chose was the wrong one. Reading the advance of the cyclicals as a preference taking root was the month's most natural invitation; six months later, it was the sharpest flight on the grid. Rebalancing is real; its direction, almost always provisional.

Continue reading: The discounted shelter in a month without courage · The same ceiling, with the tenants swapped · The reunion with what protects →

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