Fiscal policy in check: How to hedge your stock portfolio against the risk of instability

The sustainability of Brazil's public accounts has become the primary pricing driver for the Ibovespa, overshadowing minor corporate news. As expenditure growth outpaces revenue capacity, the risk premium on future interest rate curves surges, penalizing the valuation of listed companies, especially highly leveraged ones. Fiscal uncertainty translates directly into stock volatility and the repricing of projected profit multiples, requiring investors to reassess exposure to sectors sensitive to the cost of capital. Currently, the 12-month accumulated IPCA stands at 4.44%, down from 4.64%, suggesting an inflationary relief that could be neutralized if fiscal risk premiums continue to pressure the dollar. With the US currency at R$ 5.16, the market remains cautious, as exchange rate stability is a key pillar for exporters and import costs. Following the post-2Q26 earnings euphoria, the market is shifting toward extreme selectivity. Investors should prioritize companies with resilient cash flow and low leverage, avoiding value traps by focusing on intrinsic value. With the Selic rate at 14.00%, the risk of deteriorating confidence may force a steeper long-end interest rate curve, causing growth stocks to suffer more severe multiple compression than value stocks. Over the next 180 days, the outlook hinges on fiscal credibility: in a base scenario of continued uncertainty, the Ibovespa is expected to remain sideways, while a pessimistic scenario of total fiscal loss of control would favor companies with strong hard-currency cash generation.