The Day at a Glance | May 7 2024

The Top

• Mexico´s automotive sector has maintained itsmomentum through the first four months of 2024.

• Retail sales in the Eurozone rebounded in March, surpassing market expectations.

• INEGI released April´s Consumer Confidence Indicator, which remained unchanged from the previous month´s47.3 points.

• German exports rebounded in March and were driven by strong demand from the US and China, but industrial orders disappointed, dampening hopes of a rapid economic recovery.

• Masato Kanda, of the Japanese government, said Tokyo may need to take action again against any disorderly exchange rate movements driven by speculation.

• Oil remained unchanged on Tuesday after tensions in the Middle East balanced with weakness in oil markets.

• Wall Street started today´s trading session in mixed territory.

Economic Environment

The automotive sector has maintained its momentum through the first four months of 2024. In the January-April period, 461,800 light vehicles were sold, 1,286,356 units were produced, and 1,115,455 cars were exported. Annual growth set at +11.9% in sales, +5.7% in production, and +12.1% in exports. Compared to the first four months of 2023, the highest increases in production were seen in Volkswagen with an increase of 40.7%, followed by Honda and JAC with 33.5% and 25.7%, respectively. Concerning exports, the brands with the highest annual growth rates in the January-April period were Honda with 58.6%, Volkswagen with 46.9%, and BMW with 44.5%. Every month, INEGI gathers information from the 23 companies affiliated with the Mexican Automotive Industry Association (AMIA for its acronym in Spanish), Giant Motors Latinoamérica, and Autos Orientales Picacho. The automotive sector´s data has recorded positive momentum, especially due to double-digit growth in the sector; we expect good figures for private consumption and the trade balance in the coming months.

Retail sales in the Eurozone rebounded in March and surpassed market expectations. In March, retail sales grew by 0.7% year-on-year after having fallen by -0.5% the previous month. This result compares positively with the consensus expectation of a -0.2% decline and marked the first positive reading since September 2022. Food sales increased by 1.1% year-on-year, non-food product stores by 0.8%, gasoline stations declined by -0.6%. On a monthly basis, retail sales also exceeded market expectations of 0.6% growth by recording a 0.8% figure in March, up from February´s -0.3% figure. Overall, March´s data logged some strength in consumer spending within the European block, which aligns with other economic indicators that show that the Eurozone´s economy is starting to gain some momentum.

Markets and Companies

Global markets with positive sentiment. Major US indices closed higher yesterday. This morning, markets began the day in mixed territory: Dow +0.19%, S&P +0.22%, and Nasdaq -0.01%. In Europe, markets are recording gains, with the Euro Stoxx up +0.98% and all sectors in the green; financial services are leading gains with a 2.5% increase. In Asia, markets recorded an increase: Japan’s Nikkei 225 resumed trading after a holiday to close up +1.57%, reaching 38,835.1, and China was up +0.22%. In Mexico, the IPC is up, reaching 57,434.9 points (+0.27%). Oil prices decreasedas the Gaza war remains uncertain, setting at $78.2 per barrel. Natural gas is up (+0.46%). Meanwhile, most metals are down, with gold -0.2%, silver -0.2%, and copper -0.5%. Lastly, cryptocurrencies are up.

The exchange rate fluctuated during the early hours, reaching a low of 16.83 and a high of 16.84, currently trading at 16.83.

Corporate News

• Disney shares fell more than 8% despite surpassing quarterly expectations and posting in-line revenues.

• Palantir plunged 12% due to lower-than-expected guidance.