The Day at a Glance | February 9 2024

The Top

*Industrial production in Mexico disappoints in December.

*In an interview for an American network, Vladimir Putin asserted that he has no intention of expanding the war to other countries but will fight for Russia’s interests. 

*The IMF urges the Bank of Japan to end bond yield control and the massive asset purchases.

*New bank loans in China reached a record level in January, thanks to political support.

*U.S. President Joe Biden will not face charges for handling classified documents when he left the vice presidency in 2017.

*The S&P 500 reached a record high by surpassing 5,000 for the first time. In the last 18 hours, earnings reports from Pinterest and PepsiCo were released, impacting their stocks. Additionally, Google is rebranding its artificial intelligence chatbot, formerly known as Bard.

Economic environment

In Mexico, industrial production disappointed in December. December´s figures logged 1.2% growth in the country’s industrial activity. This figure set well below the 2.9% YoY observed in November and the 2.0% YoY expected by market analysts. Internally, two out of the four components recorded contractions, with the most significant being manufacturing industries at -2.3% YoY, while mining decreased by -1.5% YoY. However, it is worth noting that construction showed robust growth (15.5% YoY). On a monthly basis, industrial production in Mexico fell by -0.7% (0.0% expected), with declines in all its components except for mining (1.4% MoM). Overall, the Mexican industrial sector concluded the year with a significant slowdown, indicating some weakness heading into the next year.

Markets and companies

Global markets show mixed sentiment. The S&P 500 crossed 5,000 for the first time in the last minutes of Thursday’s trading session but dropped again to close at a record of 4,997.91. The Dow Jones set a new record, closing at 38,726.33. However, gains for each of the major indices were modest, with only a 0.06% increase for the S&P, 0.13% for the Dow, and 0.24% for the Nasdaq Composite. Each index is in positive territory for the week, heading into the last trading session. Today, futures for major U.S. indices are as follows: Nasdaq leads with a +0.74% increase, Dow is up +0.36%, and the S&P 500 rose +0.56%. Meanwhile, Treasury bond yields saw little change on Friday as new economic data was evaluated, and potential interest rate cuts by the Federal Reserve were considered. The 10-year Treasury bond yield remained at 4.13%. European markets were slightly up on Friday as the latest wave of corporate results and economic data was assimilated. The EuroStoxx 600 index rose by +0.19%, with healthcare stocks increasing by 1%, while utilities fell by 0.9%. In Asia, markets closed mixed, with Japan’s Nikkei reaching new 34-year highs on Friday, while most markets were either fully or partially closed for the Lunar New Year holidays. The Nikkei 225 surpassed the 37,000 mark for the first time in 34 years, rising by 0.9%, while the Topix remained stable. China remained unchanged. In Mexico, IPC futures continue to rise, standing at 58,249 points (+0.84%). Oil prices are on track for weekly gains, though tensions persist in the Middle East after Israel rejected a ceasefire offer from Hamas. The price stands at $76.03 per barrel. Natural gas prices are down, while gold prices per ounce are at $2,033.02, influenced by a stronger dollar and higher Treasury yields, anticipating next week’s U.S. inflation reading for clues on when the Federal Reserve might start cutting interest rates. Silver is trading at $22.67 per ounce, and copper at $366.95 per pound. Lastly, cryptocurrencies are on the rise, with Bitcoin trading at $47,298 USD.

After yesterday´s trading session, the exchange rate fluctuated between a minimum of 17.10 and a maximum of 17.17, currently trading at 17.11.

Corporate news

*In 4Q23, Fibra Macquarie reported a 0.9% YoY growth in revenues, while Funds From Operations (FFO) decreased by 2.8% YoY. In dollars, the variation was 11.9% in revenues and 8.8% in FFO. The consolidated portfolio occupancy closed at 97.3%, with the industrial portfolio at 98.1% and the commercial at 92.0%. The ordinary distribution for the quarter will be P$0.525 per CBFI. Additionally, Fibra Macquarie will make an extraordinary distribution of approximately P$1.7 billion, expected to be paid before March 15, 2024, with 70% in kind (certificates) and 30% as a cash distribution. For 2024, the adjusted funds from operations (AFFO) guidance is between US$116 million and US$120 million, representing an annual increase of 6% to 8%.

*PepsiCo falls 2% after reporting mixed quarterly results due to decreased demand in North America.

*L’Oreal records a drop of over 7.3% as the company reported sales below expectations and signaled a slowdown in demand in Asia.

*Hermés rises by 4.5% backed by a strong earnings report.

*United Airlines gains 2.7% after Evercore ISI upgrades the company’s rating from “in-line” to “outperform,” indicating that shares could advance more than 50% from this point.

*Expedia Group falls 15%, despite posting fourth-quarter adjusted results that exceeded consensus expectations.