The Day at a Glance | March 20 2024

*The Timely Economic Activity Indicator (IOAE for its acronym in Spanish) estimates that, in January and February of 2024, the Mexican economy grew by 2.2% and 2.4%, respectively.

*This afternoon, the Federal Open Market Committee (FOMC) will announce its monetary policy decision. No cut in the federal funds rate range is expected.

*Yesterday, the Central Bank of China kept its primary loan rates unchanged for 1 and 5 years at 3.45% and 3.95%, respectively.

*The US Secretary of State, Antony Blinken, embarked on a diplomatic mission in the Middle East in search of a new attempt at a ceasefire in Gaza.

*The ECB cannot commit to a predetermined number of interest rate cuts, as the pace of cuts will depend on upcoming data: Christine Lagarde, President of the ECB.

*Global markets mostly negative. Investors remain on hold awaiting the Fed’s decision.

Economic environment

The Timely Economic Activity Indicator (IOAE for its acronym in Spanish) estimates that, in January and February of 2024, the Mexican economy grew by 2.2% and 2.4%, respectively, according to seasonally adjusted figures. By components, industrial production, which includes construction, manufacturing, power generation, and mining, possibly grew by 2.3% in February 2024, after growing by 1.9% in January. On a monthly basis, February’s growth would be 0.3%. On the services side, it is estimated that they grew by 2.6% year-on-year and 0.3% month-on-month in February. The IOAE anticipates that the economy resumed growth in the first two months of the year, after logging a slowdown in various economic indicators in November and December. According to IGAE figures and IOAE estimates, the economy possibly grew by around 2.5% in the first quarter of 2024.

Markets and companies

Global markets mostly negative. Investors remain on hold awaiting the Fed’s decision. Stocks in the U.S. remain virtually flat after a winning day for the major indices; and investors await the Fed’s latest policy decision. They expect the central bank to keep interest rates unchanged at the end of its two-day policy meeting. It is worth mentioning that some are concerned that a recent wave of high inflation reports could result in even fewer cuts than markets are expecting. The S&P 500, Nasdaq, and Dow Jones are down -0.07%. In Europe, markets show mixed movements while investors also await the Fed’s policy decision. The pan-European Stoxx 600 was 0.04% lower in early afternoon trading, with sectors trading in mixed territory. Household goods were down 1.9%, while chemical stocks rose 0.9%. In Asia, markets rose ahead of the Fed’s interest rate decision. Asia-Pacific markets rose as investors digested the historic change in the Bank of Japan’s monetary policy; the bank raised interest rates on Tuesday for the first time in 17 years and scrapped its yield curve control policy, sending the Nikkei beyond the 40,000 mark for the first time in almost two weeks. In Mexico, the IPC is down -0.15% and stands at 55,462 points. As for commodities, oil prices fall on Wednesday after hitting multi-month highs in the previous session; WTI -1.5%; Brent -1.2%. Meanwhile, metals are mixed: gold -0.1%, silver +0.3%, and copper -0.4%. Lastly, cryptocurrencies show mixed figures. The cryptocurrency market sheds $400 billion after Bitcoin’s all-time high as it looks to stage a rebound.

After yesterday´s trading session, the exchange rate ranged from a low of 16.78 to a high of 16.84, currently trading at 16.83.

Corporate news

*Chipotle shares rose 6.6% pre-market after the fast-casual Mexican chain announced a 50-to-1 stock split.

*MicroStrategy Incorporated shares rose over 2%, rebounding after TD Cowen slashed its price target on MicroStrategy after the company doubled down on a Bitcoin buying spree.

*Nordstrom shares increased by around 10% yesterday after a report stated that the department store operator is considering going private. According to Reuters, the retailer’s founding family is working with Morgan Stanley and investment bank Centerview Partners to determine if private equity firms have interest in a deal. Morgan Stanley declined to comment.