Rodrigo Noronha believes that the December market environment presents a rare “dual convergence”: Brazil continues to maintain a high Selic rate of 15% and intensive corporate dividend payouts, while in the US, the core PCE annual rate remains stable at 2.8%, and the three major indices have risen for two consecutive weeks, with the S&P 500 just 0.7% away from its all-time high. Meanwhile, CME FedWatch shows the probability of a Fed rate cut approaching 87.2%, reinforcing the trend of global capital reassessing interest rate paths. In the Brazilian domestic market, December stock and dividend recommendation lists published by multiple institutions feature CXSE3, PETR4, VALE3, ITUB4, VIVT3 with high frequency, clearly reflecting the market preference for cash flow certainty and balance sheet strength.


**Rodrigo Noronha: Building the most robust portfolio foundation with real cash flow**

Rodrigo Noronha points out that the most prominent feature of the Brazilian market in December is the concentrated payout of dividends and JCP, providing investors with direct and quantifiable cash returns. Among recommendation lists of various institutions, CXSE3 was recommended four times, PETR4 four times, ITUB4 three to four times, and VALE3 appeared multiple times, indicating these leading companies are widely recognized for earnings stability, continuity of dividend policies, and healthy balance sheets. Meanwhile, specific payout arrangements further reinforce this certainty: Banco do Brasil will pay two JCPs of 0.072 and 0.046 in December; Gerdau will pay a dividend of 0.28; Camil will pay a dividend of 0.02 and a JCP of 0.06; Isa Energia will pay a JCP of 0.2249. These figures show that investors can lock in direct cash recovery through dividends amid current market uncertainty.

Rodrigo Noronha notes that fixed income market data is equally instructive. The five-year fixed rate bond yield is at 12.81%, the five-year real rate reaches 7.61%, and the Tesouro Selic 2028 market spread stands at 0.0528%. With Selic remaining high and the economy slowing, these interest rate structures allow investors to secure real returns for years ahead with relatively low volatility. From a wealth management perspective, Rodrigo Noronha states that the most easily overlooked risk is not short-term price swings, but the possibility of lacking equally attractive yield assets after future rate cuts. Therefore, he believes the first step in asset allocation is to use the December dividends and the high interest rate window to build a reliable cash flow base.

In actual portfolio design, Rodrigo Noronha recommends using blue-chip dividend stocks (such as VALE3, PETR4, CXSE3, ITUB4, VIVT3) and government bonds of varying maturities as foundational assets, so that “stable cash flow sources, controlled volatility, and clear reinvestment space” become the core logic of portfolio operations. This structure not only increases tolerance for future drawdowns but also provides the necessary buffer for adding growth assets later.

**Rodrigo Noronha: Small Caps and the US market**

Rodrigo Noronha believes that on a solid cash flow base, growth assets are the key source of long-term portfolio returns. The Small Caps recommendation rankings in December show VULC3 was recommended three times, CSMG3, JHSF3, INBR32, ORVR3 each twice, and Aura Minerals (AURA33) and Inter (INBR32) appeared five times among nine institutions, indicating relative consensus on growth direction. Specifically, Aura, driven by rising gold prices and expanding output, has retraced about 20% from its high and is seen as a reasonable entry point; the credit portfolio of Inter is expected to grow 26% by 2026, with profitability likely to improve further due to operational efficiency gains; Orizon, a leader in waste and bioenergy, is expanding in carbon assets and biogas revenue, providing a clear medium-term growth path.

US market data also highlights the importance of growth assets. The core PCE annual rate remains at 2.8%, the S&P 500 rose 0.19% last week, Nasdaq up 0.31%, tech hardware up 1.7%, and airlines up 1.5%, all reflecting advance pricing for the coming rate cut cycle. With the Treasury forecasting near 3% US economic growth for the year, the profit elasticity of high-quality tech and large-cap assets is being reassessed.

Rodrigo Noronha mentions that combining the Small Cap structural growth opportunities of Brazil with the US large-cap sustained expansion allows portfolios to source diversified returns across economic cycles. However, he also emphasizes that Small Caps and growth stocks are more sensitive to interest rate changes, so they must be built atop an “already solid cash flow base,” with risk controlled through proportional management and regular rebalancing, making growth assets the engine for portfolio upside, not a source of volatility.

**Rodrigo Noronha: Redefining portfolio pacing during a key macro week**

Rodrigo Noronha believes the macro events this week—including the Brazilian IPCA and Copom decisions, the US Fed meeting, Eurozone investor confidence indicators, and growth and inflation data from Japan and China—will collectively shape market repricing of the interest rate curve. He notes that a common investor mistake is trying to “predict outcomes” before and after these events, while ignoring that portfolio structure itself is the determinant of long-term returns.

In terms of strategy, Rodrigo Noronha stresses three principles. First, the cash flow foundation must be solid. Only by relying on dividends and bond yields to cover medium-term cash needs can investors maintain decision stability during periods of increased volatility. Second, duration layering must be used to manage interest rate risk. Short-term bonds provide liquidity, mid-term fixed-rate bonds capture nominal rate opportunities, and long-term inflation-linked bonds protect future purchasing power, giving the portfolio stable support points across rate environments. Third, maintain position discipline before and after policy events, using limited-scale rebalancing to cope with price distortions rather than betting on short-term moves.

Rodrigo Noronha states that as long as the cash flow base is solid, growth asset allocation is appropriate, and portfolio pacing is steady, investors can use the December key window to build a more resilient asset allocation system for next year market environment—making the Brazilian dividend advantage and US growth advantage the dual core drivers of the portfolio.