The Day at a Glance | October 14 2024

The Top

*In China, consumer prices rose at a slower-than-expected pace in September, while producer prices decreased. 

*The Asian giant’s exports and imports fell short of market expectations. 

*The Nobel Prize in Economics was awarded to Daron Acemoglu, Simon Johnson, and James Robinson for their studies on how institutions are formed and how they affect prosperity. 

*On Monday, S&P Global Ratings warned that countries are more likely to default on their foreign currency debts more frequently over the next decade than in the past due to higher debt and rising borrowing costs. 

*On Monday, Democratic presidential candidate Kamala Harris unveiled new policy proposals aimed at the African American population, including forgivable loans for small businesses and access to a new legal recreational marijuana industry. 

*In Mexico, the consumer confidence indicator stood at 47.1 points in September 2024, logging a monthly 0.4 point decrease, according to seasonally adjusted figures. 

*On Monday, OPEC cut its forecast for global oil demand growth in 2024; it also lowered its forecasts for 2025, marking the group of producers’ third consecutive downward adjustment.

Economic environment

In China, consumer prices rose at a slower-than-expected pace in September, while producer prices decreased. China’s annual consumer inflation increased by 0.4% y/y in September 2024, below the market expectation of 0.6% y/y. Meanwhile, core inflation stood at 0.1% y/y in September 2024. On a monthly basis, consumer inflation remained flat (0.4% prev.) in September. As for producer price inflation, the annual reading stood at -2.8%, falling more sharply compared to August’s -1.8% and the consensus estimate of -2.6%. Overall, China’s consumer inflation unexpectedly declined in September, while producer price deflation deepened, increasing pressure on Beijing to quickly implement more stimulus measures to revive weakening demand and unstable economic activity. 

The Asian giant’s exports and imports fell short of market expectations. September´s exports recorded a 2.4% y/y increase (8.7% prev.), well below the consensus expectations of 6.0% y/y. Despite this, exports marked six consecutive months of expansion; however, the growth rate was the slowest since April of this year. On the other hand, imports slowed significantly, with a slight increase of 0.3% y/y, also below the consensus expectations of 0.9% y/y and following a 0.5% rate of growth in August. Considering that about one-third of Chinese imports are intermediate goods, i.e., goods imported to later be exported, the outlook looks bleak, especially in sectors such as electronics. Trade balance data fell short of market estimates, suggesting that companies are cutting prices to move inventory before the imposition of tariffs by various trading partners.

Markets and companies

The S&P 500 reached all-time highs at the start of the week as investors awaited the next round of corporate earnings reports. Bank of America, Goldman Sachs, and Johnson & Johnson will release their latest results on Tuesday before the market opens, while Morgan Stanley and United Airlines are scheduled to report on Wednesday. In Europe, stocks edged slightly higher on Monday, with regional markets seeking direction after a volatile week last week. The Stoxx 600 was up 0.12% at 1:54 p.m., London time; mining stocks fell 1.07%, and household goods stocks declined 1.01%. Meanwhile, Asia-Pacific markets mostly rose on Monday as investors assessed China’s weekend press briefing and awaited a series of economic data from the region this week. In commodities, crude oil prices fell nearly 2% after OPEC cut its demand forecast for 2024 for the third consecutive time. Metals are down, and cryptocurrencies are up. In Mexico, the IPC is down -0.04% and stands at 52,377 points. 

Over the weekend, the exchange rate ranged between a low of 19.26 and a high of 19.35. It´s currently trading at 19.33. 

ANTAD reported sales results for September. Same-store sales increased by +3.1% in nominal terms. Regarding total store sales, which include both existing stores and those opened in the last 12 months, there was a +6.5% growth rate compared to the same period last year.

Corporate news

*Cryptocurrency-linked stocks rose as Bitcoin surged above $64,000 at the start of the week. Extending gains from the previous session, MicroStrategy and Mara Holdings, formerly Marathon Digital, each rose more than 5%, while Coinbase was up more than 3%. 

*Flutter Entertainment climbed 4% after Wells Fargo upgraded the stock to overweight, stating that investors should consider buying the stock after its recent decline.