The Day at a Glance | June 26 2024

The Top

 Data in the United States suggests moderation in the economy during the second quarter of the year.

• On Wednesday, two European Central Bank officials said that the ECB could gradually reduce interest rates if inflation falls as expected in the coming months.

• On Wednesday, the Japanese yen fell to its lowest level since 1986 against the dollar, keeping currency markets alert for any signs of intervention by Japanese authorities to boost the currency.

• The Biden administration provided $85 million to facilitate housing development.

• Beijing reduced home purchasing costs to boostdemand.

• Oil prices rose slowly on Wednesday, approaching theirhighest level in almost two months, driven by forecasts of an inventory reduction during peak demand season(summer) in 3Q24 and geopolitical risks triggered by the conflict in the Middle East.

Economic Environment

Data in the United States suggests there was moderation in the economy during the second quarter. Yesterday, theCFNAI (Chicago Fed National Activity Index) was released, which suggests that, in May, growth rebounded to 0.18 points, after falling by -0.26 points in April. This index is made up of 85 indicators from various sectors of the economy, such as employment, production, consumption and new orders in the productive sectors. Its three-month moving average stood at -0.16 points in May, after stand at -0.13 points in April, suggesting little inflationary pressure and growth close to its long-term trend, although the latter logged some moderation. On the other hand, consumer confidence fell to 100.4 points in June, after standing at 101.3 points in May, according to figures from The Conference Board. The decline in the index is due to future uncertainty in light of a solid labor market, according to comments from Dana Peterson, Chief Economist of The CB. Later, the sale of new houses will be announced; they are expected to set at 647 thousand. The CFNAI and the CB´sfigures suggest that the economy could begin to moderate its growth rate in the coming months, however, the strength of the labor market and strong job creation continue to play a strong role and boost a resilient economy.

Markets and Companies

The S&P 500 falls slightly as investors assess the market’s outlook for the second half of 2024. The first half of the year was positive due to the boom led by artificial intelligence stocks. Today, the S&P 500 is on track to record its fourth day of losses in the last five, and close out a gain of almost +15% in the first six months of 2024. In Europe, stocks are down, extending the negative sentiment recordedin the previous session. The Stoxx 600 was down -0.71% at 1:54 p.m. London time; automobile stocks were down-1.72% and travel and leisure stocks were down -1.99%, while technology stocks were up +0.1%. In Asia, markets closed mostly higher as semiconductor stocks rose after Nvidia rallied overnight; Japan’s Nikkei was up +1.26% andclosed at 39,667.07, reaching its highest level since April 9^th. Regarding commodities, oil prices are recovering while investors hope that US inventory data points to greater fuel demand in the summer. Metals and cryptocurrencies are down, and in Mexico, the IPyC is slightly up (+0.05%) standing at 52,630 points.

After yesterday’s trading session, the exchange rate ranged between a low of 18.08 and a high of 18.28, currently trading at 18.25.

Corporate News

• FedEx rose +14% after posting earnings that beat estimates. 

• Rivian soared +36% after Volkswagen said it would invest up to $5 billion in the electric vehicle company. 

• Nvidia fell around -1% after rising +7% on Tuesday, its first positive day in four.