The Day at a Glance | May 15 2024

The Top

• In Mexico, $20.313 billion was captured between January and March in Foreign Direct Investment (FDI), an all-time high for a first quarter.

• In the United States, CPI inflation was 3.4% in April, down from 3.5% in March.

• Retail sales in the U.S. stagnated in April after 0.6% monthly growth in March.

• The Eurozone’s GDP grew by 0.4% year-on-year during Q1 2024, while industrial production grew by 0.6% month-on-month, above the consensus estimate of 0.5% month-on-month.

• Oil prices fell on Wednesday after the International Energy Agency decreased its forecasts for oil demand in developed countries.

• U.S. stocks are up as April inflation was lower than expected, reviving the possibility of a Fed rate cut. The S&P 500 rose to an all-time high.

Economic Environment

In Mexico, $20.313 billion was captured between January and March in Foreign Direct Investment (FDI), an all-time high for a first quarter. This FDI figure is an increase of 9.0% compared to the $18.636 billion reported a year ago for Q1 2023, according to the Ministry of Economy and preliminary figures. Reviewing FDI by category for the first quarter of the year, $19.615 billion was reinvestment of earnings (Q1 2023: $16.705 billion), $599 million was new investments (Q1 2023: $932 million), and $99 million was inter-company accounts (Q1 2023: $999 million). Seasonally, the first quarters in Mexico are high in FDI due to reinvestment of earnings. Additionally, 42% of Q1 2024 FDI occurred in the manufacturing sector, primarily in sectors of transportation equipment, beverages and tobacco, food, chemicals, metals, plastics and rubber, electric power generation equipment, computer equipment, and paper. A new all-time high in FDI reaffirms the country’s position as an attractive investment destination. Moreover, continued growth of earnings reinvestment reflects confidence in Mexico due to its stability and business environment. The consensus forecast for FDI for the entire year is $40 billion.

In the United States, CPI inflation was 3.4% in April, down from 3.5% in March. The Bureau of Labor Statistics released April´s consumer price inflation figures, which logged a 0.3% month-on-month increase. The report highlighted that 70% of April’s monthly increase came from two categories: housing and gasoline. Meanwhile, inflation excluding food and energy, known as core inflation, also grew 0.3% month-on-month in April after growing 0.4% month-on-month in the first three months of the year. On an annual basis, general and core inflation were 3.4% and 3.6%, respectively.

Markets and Companies

U.S. stocks are up as April inflation was lower than expected, reviving the possibility of a Fed rate cut. The S&P 500 rose to an all-time high. The data comes after another report pointed to stickier inflation. In Europe, markets are up thanks to U.S. inflation data. The Stoxx 600 index was up 0.5% at 2:10 p.m. London time. Most sectors are up, with the utilities sector increasing 1.6%, while consumer goods are down 0.3%. In Asia, markets loggedmarginal movements ahead of the U.S. inflation data release; additionally, markets in South Korea and Hong Kong were closed on Wednesday for a public holiday. Regardingcommodities, crude oil prices fell on Wednesday as the International Energy Agency forecasts that global demand will grow less than originally anticipated. U.S. oil and Brent are down 5.4% and 6.8% for the month, respectively. Metals are recording mixed figures, and cryptocurrencies are up. In Mexico, the IPC is up 0.19%, standing at 57,338 points.

After yesterday’s trading session, the exchange rate fluctuated between a low of 16.78 and a high of 16.87, currently trading at 16.79.

Corporate News

• Boeing shares fell 1.1% after the Department of Justice said Boeing violated a 2021 settlement related to its two fatal 737 Max crashes, exposing the company to potential U.S. prosecution.

• Dell shares rose 2% after Morgan Stanley raised its price target.

• SunPower shares fell 22.3%, giving back part of their 59% gain from the previous session.