Ibovespa retreats 3% around the holiday after fear of 2nd wave bring down stock exchanges

The Brazilian stock market retreated, on Friday, 12, in a move of adjustment, after international markets had shown strong devaluations the day before. As there was no trading session the day before, due to the holiday, the negative effects are felt today in the Brazilian market. At 10:17 a.m., the Ibovespa, the main stock index, fell 3.06% to 91,793.23 points.
On The 11th, the fear of a second wave of contamination took over the financial market after cases of coronavirus in western States increased. As a com, the main stock indexes recorded significant losses. In the United States, the Dow Jones had the biggest devaluation since March, down 6.9%. The EWZ ETF, which represents the Brazilian stock market in the U.S., fell 7.8%.
In the Brazilian market, the Ibovespa was expected to fall further, the losses of international exchanges would extend to today – which did not occur. Overseas, major stock indexes recover parts of the depreciations of the day before. In Europe, the pan-European index is up 1.25%, while in the U.S., the S&P 500 and Dow Jones futures are up more than 2%.
The fear of the market is that a second wave could revive quarantines, which could intensify the economic damage. However, U.S. Treasury Secretary Steven Mnuchin, in an interview with CNBC, ruled out the possibility of a second lockdown in the country, which helped dampen market pessimism.
But Pablo Spyer, Mirae Asset's chief operating officer, doesn't believe that fear of a second wave was the main reason for the fall the day before. "They sought some reason to make profits. After two weeks of very strong highs, the need for profit realization was evident," he said.