The Day at a Glance | October 15 2024

The Top

• The Eurozone´s industrial production rebounded in August. 

• China could raise an additional 6 trillion Yuan ($850 billion) in special Treasury bonds over three years to stimulate economic recovery. 

• According to a Reuters survey, the Bank of Japan is not expected to raise its interest rates for the rest of the year, as per a narrow majority of economists surveyed, although nearly 90% anticipate rate increases by the end of March.

• UK wages increased at their slowest pace in over two years, and unemployment fell again, according to official data. These figures are good news for the Bank of England as it´s considering when to cut interest rates again. 

• The global oil market is heading for a significant surplus, the International Energy Agency said on Tuesday, while assuring markets that the agency was ready to act, if necessary, to cover any supply disruptions from Iran. 

• On Tuesday, oil prices fell more than 4% to a near two-week low due to a weaker demand outlook and after a media report suggested that Israel is willing to avoid attacking Iranian oil targets, easing supply disruption fears.

Economic Environment

The Eurozone´s industrial production rebounded in August. Eurozone industrial production increased by 1.8% m/m in August after a -0.5% m/m decline was logged in July and a 0.3% rise was recorded in June. August´s figuresalmost set in line with the market consensus, which had anticipated a 1.7% m/m increase. This positive performance was driven by gains in capital goods (3.7% m/m), durable consumer goods (1.7% m/m), energy (0.4% m/m), and non-durable consumer goods (0.2% m/m), while intermediate goods decreased (-0.3% m/m). On an annual basis, the Eurozone´s industrial production increased by 0.1% in August, with three of its five components logging growth. In this context, it’s worth noting that the annual increase came from energy production (2.6%), non-durable consumer goods (2.0%), and capital goods (0.2%), as the production of durable consumer goods and intermediate goods declined by -4.8% and -2.7%, respectively. Additionally, the European block´s major economies also logged declines in their annual comparisons during August, such as Germany at -2.5% (prev. -5.7%), Spain at -1.3% (prev. -0.8%), and Italy at -3.2% (prev. -3.3%), while France increased by 1.1% (prev. -1.3%). Overall, the Eurozone´s industrial production figures showed good progress on the margin; however, they remain weak in their annual comparison.

Markets and Companies

The US stock market is logging mixed figures as the S&P and Nasdaq are up, while the Dow Jones Industrial Average (DJI) is down. Investors are focused on the start of the quarterly earnings season, with today’s notable reports coming from companies like UnitedHealth, Johnson & Johnson, and Bank of America.

In Europe, markets are mixed, with the telecommunications sector rising following a strong report from Ericsson. Meanwhile, China´s market was down after foreign trade data for September came in below expectations.

In commodities, oil prices are down, as the International Energy Agency indicated that, in the absence of further production disruptions due to geopolitical conflicts, an oversupply is expected for the coming year.

Treasury bond yields are declining, with the 2-year bond trading at 3.93% and the 10-year bond at 4.05%.

In Mexico, the IPC opened higher, trading at 52,052.3 points. The exchange rate for the peso against the dollar is at 19.59, after closing at 19.36 yesterday.

Today, América Móvil’s earnings report is expected to be released, marking the start of the earnings season in Mexico. Overall, the company is expected to show stable results, with single-digit growth in users and a positive accounting effect due to the peso’s performance against other currencies during the quarter.

Corporate News

• Bank of America’s quarterly report exceeded expectations in terms of revenue and earnings per share. 

• Johnson & Johnson’s stock was up due to a solid quarterly report. The company also raised its earnings guidance for the year. 

• Goldman Sachs reported better-than-expected results, driven by the performance of its trading and investment banking segments.