The Day at a Glance | June 10 2024

El Día en Minutos
10 junio, 2024, 6 meses ago
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The Top

• Tourism revenues continue to reach all-time highs.

• The Ministry of Economy reported new investment announcements as of May 31^st.

• This week will bring the Federal Reserve’s monetary policy announcement and the central bank´s updated”dot plot.” We might see less willingness to cut rates before the end of the year.

• The ECB may wait all summer before considering another interest rate cut, as inflation is far from being overcome and price pressures could resurface, said ECB official Peter Kazimir.

• Japan’s economy shrunk less than initially reported in Q1 2024 due to upward revisions in capital spending and inventory data, providing modest support for the central bank’s plans to raise interest rates again.

• Oil prices rose on Monday, driven by expectations of higher fuel demand this summer (driving season), although gains were limited by the strengthening dollar.

• U.S. stocks are down as investors await the Fed’s decision and inflation data.

Economic Environment

Tourism revenues continue to reach all-time highs. In Mexico, net revenues from international travelers amounted to $9.415 billion (USD) for the January – April 2024 period, the highest on record for a similar period since data startedbeing recorded in 1990. This represents a 3.5% increase compared to the same period of 2023. Net revenues consist of foreign exchange income worth $12.510 billion and expenditures worth $3.096 billion, which entails growth rates of 8.2% in income and 25.3% in expenditures compared to the first four months of the previous year. These revenues are part of the tourism account in the balance of payments and contribute to the country’s surplus foreign exchange accounts. The figures suggest there wasmoderation in tourism activity in the first four months of 2024.

The Ministry of Economy reported new investment announcements as of May 31^st. The Ministry of Economy reported that from January 1^st to May 31^st, 2024, 127 investment announcements were made, worth an estimated total of $39.157 billion (USD). Additionally, the Ministry noted that this amount is expected to enter the country over the next two to three years and would create around 51,958 new jobs. The Ministry of Economy´s report highlights three companies: 1) Evergo, with $200 million for energy-related manufacturing, 2) LT Precision, with $143 million for steel manufacturing, and 3) Daikin, with $122 million for air conditioning products.

Markets and Companies

U.S. stocks are down as investors await the Fed’s decision and inflation data. The S&P 500 hit an all-time high on Friday. However, the Fed’s rate decision and May’s consumer price index, expected on Wednesday, could be key tests for markets, especially after Friday’s strong jobs report suggested the central bank might rule out lowering rates. In Europe, markets are down. Investors are reacting to the initial EU elections results and the surprise call for parliamentary elections by French President Emmanuel Macron. The Stoxx 600 was down -0.56% at 2:00 p.m. London time, with construction stocks leading losses (-1.5%). In Asia, markets closed mixed as they await Fed and BOJ decisions this week; some markets were closed for a holiday on Monday (mainland China, Hong Kong, and Taiwan). As for commodities, oil prices are up after closingwith a weekly loss on Friday. Metals are up; gold stabilized on Monday after a sharp sell-off in Friday’s session due to stronger-than-expected U.S. jobs data. Cryptocurrencies are on the rise, and in Mexico, the IPC index is up +0.23%.

Over the weekend, the exchange rate fluctuated between a low of 17.85 and a high of 18.56, currently trading at 18.46.

Corporate News

• Shares of KKR climbed more than 8%, while CrowdStrike and GoDaddy rose 6% and 3%, respectively. The three companies will join the S&P 500 on June 24^th as part of the index’s quarterly rebalancing.

• Shares of AMD fell more than 2% following a downgrade from Morgan Stanley.