The Day at a Glance | June 21 2024

The Top

• Figures from April´s IGAE and May´s IOAE suggest that the economy may have stagnated in Q2 2024.

• Eurozone PMI´s show that the European block´s economic recovery is slowing as new orders decreased for the first time in four months.

• On Friday, Beijing warned that growing tensions with the European Union over electric vehicle imports could trigger a trade war.

• Bank of Japan Deputy Governor Shinichi Uchida statedthat he is willing to raise interest rates further.

• Oil is on track for its second consecutive week of gains amidst signs of improving demand.

• Major US indices are headed for a winning week.

Economic Environment

Figures from April´s IGAE and May´s IOAE suggest that the economy may have stagnated in Q2 2024. In Mexico, the Global Indicator of Economic Activity (IGAEfor its acronym in Spanish), a proxy for monthly GDP, fell by -0.6% on a seasonally adjusted monthly basis, below the -0.3% estimated by the Timely Indicator of Economic Activity (IOAE). The decline was widespread across the economy, with the primary sector falling the most (-2.5% m/m), followed by the tertiary sector (-0.6% m/m) and the secondary sector (-0.5% m/m), according to seasonally adjusted figures. On an annual basis and according to original figures, the IGAE increased 5.4% in April. By sector, annual growth set as follows: Primary -1.3%, secondary 5.1%, and tertiary 6.0%. For the January-April period, the economy expanded 2.6% y/y. Considering IGAE figures up to April 2024 and May´s IOAE´s figure, it appears that the economy may have stagnated on a quarterly seasonally adjusted basis in Q2 2024.

Eurozone PMI´s show that the European block´s economic recovery is slowing as new orders decreased for the first time in four months. The Eurozone´s composite PMI stood at 50.8 points in June, below May´s 52.2 figure, and marked a three-month low. In a disaggregate manner, the manufacturing PMI set at 45.6 points, below the estimated 47.9, marking 15 consecutive months below the 50-point threshold. Meanwhile, the services sector index recorded its lowest level in three months, falling from 53.2 points in May to 50.8 in June. Overall, business activity in the Eurozone expanded more moderately due to a decrease in new orders in both the manufacturing and services sectors.

Markets and Companies

Global markets carry negative sentiment. Yesterday, markets logged mixed figures, and today they are in negative territory due to a -2.0% drop in Nvidia. The Dow is up +0.09%, the S&P is down -0.05%, and the Nasdaq is down -0.41%. Meanwhile, the 10-year Treasury yield stands at 4.24%. In Europe, the Euro Stoxx index is down -0.91%, with bank stocks falling -1.5% while utility companies managed to record a +0.36% gain. In Asia, Japan’s Nikkei 225 fell -0.09%, setting at 38,596.47. China set slightly lower at 2,998.1 (-0.24%). In Mexico, the IPC is down and stands at 53,204.9 points. Oil prices are up and are heading for a second consecutive weekly gain as gasoline demand has increased to its highest levels since the pandemic. Today, the price is at $81.33 per barrel. Gold, on the other hand, fell -0.5% to $2,347 per ounce. Silver is trading at $29.91 per ounce (-2.7%), and copper at $442.8 per pound (-2.1%). Lastly, cryptocurrencies are up.

After yesterday’s trading session, the exchange rate fluctuated between a low of 18.22 and a high of 18.37, currently trading at 18.21.

GCARSO announced that it has formalized the acquisition of 100% of the capital of Petrobal, the entity holding a 50% stake in the Ichalkil & Pokoch fields, located off the coast of Campeche. The transaction was valued at $530 million dollars.

Corporate News

• Nike rose 1% after Oppenheimer upgraded its rating from market perform to outperform.

• Shares of Sarepta Therapeutics surged 33% after the Food and Drug Administration approved an additional use of the company’s gene therapy for Duchennemuscular dystrophy.