The Day at a Glance | September 30 2024

The Top

• China´s economy logged weakness in the last month of the third quarter, according to PMI indices.

• Federal Reserve Chairman Jerome Powell will give a speech on Monday in Nashville; he is expected to provide more details on the Fed’s decision to cut the federal funds rate by 50 basis points.

• European Central Bank (ECB) President Christine Lagarde said on Monday that the ECB is increasingly confident that inflation will return to its 2% target, and this should be reflected in its October monetary policy decision.

• In September, Germany’s inflation decreased to its lowest level since February 2021, preliminary data showed on Monday, backing expectations that the ECB will make another rate cut next month.

• The UK´s economy grew less than anticipated in 2Q24 (0.5% vs. 0.6%e.), however, there were positive signs in household finances and business investment, so signs of strength persist.

• Japan’s industrial production fell last month, driven by disruptions in motor vehicle production caused by hurricanes and weak sales in the US.

• Oil prices fell on Monday and are on track for a third consecutive monthly decline, as strong supply prospects and doubts about demand outweigh fears that Israeli attacks in Lebanon and Yemen could intensify the conflict in the Middle East.

Economic Environment

China´s economy logged weakness in the last month of the third quarter, according to PMI indices. China’s composite PMI stood at 50.4 points in September, after reaching 50.1 in August and 50.2 in July. Meanwhile, the non-manufacturing PMI came in at 50.0 points in September, down from 50.3 points a month earlier and below the market consensus of 50.4. Notably, the non-manufacturing PMI reading is the lowest since December 2022 and is at the 50-point threshold. Additionally, Zhao Qinghe, a statistician at China’s National Bureau of Statistics, commented that the drop in the non-manufacturing index could be related to the end of summer and the end of the holiday season, as well as some extreme weather events. Meanwhile, the manufacturing PMI rebounded from 49.1 in August to 49.8 points in September. Thus, the manufacturing indicator broke a three-month streak of declines, though it remains below the 50-point threshold. Within the manufacturing index, only production exceeded the 50-point threshold, while new orders, inventories, employees, and delivery times were slightly below. It may still be too early to see the effects of recent monetary stimulus packages in China, and the one-time transfer of 800 Yuan to households with two or more children has yet to take place. In conclusion, we should not rule out an improvement in the Asian giant’s outlook in the next PMI reading for October.

Markets and Companies

The S&P 500 slipped slightly in the final session of what is shaping up to be a winning month and quarter. This comes after the main indexes posted their third consecutive week of gains on Friday. The Dow Jones has led this quarter, rising more than 8%. The S&P 500 and Nasdaq have increased over 5% and 2%, respectively, since July began. In Europe, stocks fell on Monday, starting the week withnegative figures. The Euro Stoxx 600 was down around 1% at 1:15 p.m. London time, with all sectors in the red. Automobile stocks were the biggest laggards, falling 4.1%.Meanwhile, stocks in mainland China surged more than 8%, marking their best day in 16 years, while Japan’s Nikkei 225 fell 4.8% on Monday, as investors reacted to the results of Friday’s ruling Liberal Democratic Party election. In commodities, US crude is on track for its third consecutive monthly loss in September, as rising supplies from OPEC+ and weak demand in China weigh on the market. Metals and cryptocurrencies are also down. In Mexico, the IPC rose 0.08% to 52,822 points.

Over the weekend, the exchange rate fluctuated between a low of 19.57 and a high of 19.72. It is currently at 19.61.

Corporate News

• Nio’s US-listed shares surged more than 13% after the Chinese electric vehicle maker announced it would receive a 13.3 billion yuan cash injection for its NioChina subsidiary.

• Stellantis shares plunged more than 13% after the automaker cut its annual outlook, citing a deterioration in the global industry backdrop.