The Day at a Glance | July 22 2024

The Top

• Mexico´s economy grew in May; however, the second quarter could set below the consensus estimate.

• Retail sales in Mexico slowed to 0.3% year-over-year in May after growing 3.2% year-over-year in April.

• U.S. Vice President Kamala Harris seeks to secure the Democratic presidential nomination a day after President Joe Biden withdrew his re-election bid amidstgrowing opposition within his own party.

• China surprised markets by cutting short and long-term interest rates on Monday, signaling its intention to boost growth in the world’s second-largest economy just days after the Third Communist Plenum.

• Oil prices fell on Monday after Joe Biden announced he would not seek a second term as U.S. president, while investors remain focused on the upcoming Federal Reserve policy meeting in September.

• Main indices in the US are up after their worst week since April.

Economic Environment

Mexico´s economy grew in May; however, the second quarter could come in below the consensus estimate. In Mexico, the Global Indicator of Economic Activity (IGAEfor its acronym in Spanish), a proxy for monthly GDP, grew by 0.7% month-over-month in May, after falling by -0.7% in April and growing by 0.1% in March, according to seasonally adjusted figures. All main sectors grew month-over-month: the primary sector grew by 0.4%, the secondary sector by 0.7%, and the tertiary sector by 0.8%. Annually, and according to original figures, the IGAE grew by 1.6% in May 2024. By sector, primary activities fell by -1.8%, while secondary and tertiary activities grew by 1.0% and 2.1%, respectively. From January to May 2024, the economy grew by 2.3% year-over-year. Considering IGAE figures up to May 2024 and the IOAE figure for June, the economy could have grown around 0.3% quarter-over-quarter in the second quarter of 2024. May´s figures are encouraging, as there was marginal recovery before the end of the second quarter; however, the overall figure for the second quarter could setbelow the consensus estimate of 0.8% quarter-over-quarter.

Markets and Companies

Main indices in the US are up after their worst week since April. The S&P 500 is rising after the index recorded its worst weekly loss since April last week, as investors rotated from mega-cap technology stocks to smaller companies. Investors are also focusing on the US political landscape, after President Joe Biden dropped out of the presidential race on Sunday and endorsed Vice President Kamala Harris. In Europe, stocks rose on Monday as global markets reacted to the political news in the US. The Stoxx600 index was up +1.24% at 2:18 p.m. London time, with only the travel and leisure sector in the red (-1.54%). In Asia, stocks are down; China’s central bank unexpectedly cut rates. In commodities, oil prices are down after Joe Biden announced he would not seek a second term as US president and as investors watched for more signs that US interest rates could be cut as early as September. Metals are down and cryptocurrencies are up. In Mexico, the IPC is down (-0.14%), and stands at 53,603 points.

Over the weekend, the exchange rate fluctuated between a low of 17.97 and a high of 18.11, currently trading at 17.97.

Corporate News

• CrowdStrike shares fell 4% after Guggenheim downgraded the company to neutral from buy, saying it is unlikely the company will emerge unscathed from the global outage.

• Nvidia shares rose 2% after Reuters, citing people familiar with the matter, reported that Nvidia is preparing a version of its new Blackwell chips for the Chinese market. They would be compatible with current US export controls, the report said.