The Day at a Glance | October 16 2024

The Top

*In Mexico, the Timely Indicator of Private Consumption forecasts an improvement in 3Q24. 

*Inflation in the United Kingdom fell to 1.7% in September 2024, its lowest reading since April 2021, down from 2.2% in the previous two months, reinforcing expectations of an interest rate cut by the Bank of England in its next meeting in November. 

*On Tuesday, US Republican presidential candidate Donald Trump appeared to soften his stance regarding the president’s involvement in the Federal Reserve’s monetary policy decisions, stating that he believes he would have the right as president to tell the Fed what he thinks it should do with interest rates, but he would not dictate the decision. 

*The Bank of Japan should raise interest rates at a “very moderate” pace and avoid a premature increase, said Seiji Adachi, a member of the Central Bank’s governing board, on Wednesday, warning that further Yen gains and a global demand slowdown could weigh on inflation and wage growth. 

*On Tuesday, World Bank President Ajay Banga warned that a significant escalation of the war between Israel and Gaza could have major repercussions on the global economy, calling the enormous loss of civilian lives in the region “inconceivable.” 

*Oil stabilized on Wednesday, backed by OPEC+ cuts and uncertainty over what might happen next in the Middle East conflict, although the prospect of abundant supply next year added downward pressure.

Economic environment

In Mexico, the Timely Indicator of Private Consumption (IOCP for its acronym in Spanish) forecasts an improvement in 3Q24. INEGI announced that the IOCP, a Nowcasting model for private consumption, increased by 2.7% year-on-year in August and 1.8% year-on-year in September, according to seasonally adjusted figures. On a monthly basis, the Timely Indicator of Private Consumption increased by 0.2% in August and decreased by -0.1% in September, also according to seasonally adjusted figures. As a result, private consumption in the country could have increased by 0.9% quarter-on-quarter in 3Q24, after recording a -0.6% decline according to aggregate supply and demand figures, which would imply an improvement in the main component of GDP, as private consumption accounts for almost 70% of GDP. Cumulatively, from January to September, household consumption in the country rose by 3.2%, according to the IOCP and the Monthly Indicator of Private Consumption. Overall, the figures from the Timely Indicator suggest that during the third quarter, the economy recorded better momentum in private consumption, although we do not rule out the possibility of a moderation moving forward.

Markets and companies

US stocks are stable on Wednesday. The Dow Jones and the S&P 500 fell from their recent highs during yesterday’s session, declining by 0.75% and 0.76%, respectively. Tech stocks, especially semiconductors, weighed on the S&P 500 and the Nasdaq. The tech sector retreated 1.8% on Tuesday, with Nvidia falling more than 4%. In Europe, major indices were broadly trading lower on Wednesday, with semiconductor and luxury goods stocks among the worst-performing sectors. The Stoxx 600 was down 0.2% at 2:10 p.m. London time, with most sectors in the red. Asia-Pacific markets traded lower on Wednesday, following declines on Wall Street, with Japan’s Nikkei leading the losses in the region. Regarding commodities, the price of US crude oil is down on Wednesday; US oil tumbled more than 4% on Tuesday after Israel informed the US that it would limit its retaliatory strikes to military targets in Iran, according to senior Biden administration officials speaking to NBC News. Metals and cryptocurrencies are up. In Mexico, the IPC is up 0.05% and stands at 52,404 points. 

The exchange rate stands at 19.90 after closing at 19.70 yesterday.

América Móvil released its third-quarter results, surpassing expectations. AMX reported a 9.6% year-over-year increase in revenue, while EBITDA grew by 11.9% year-over-year, with Brazil and Colombia leading growth thanks to progress in postpaid subscribers and its corporate networks segment.

Cemex supplied 100,000 cubic meters of concrete for the Hassyan power plant in Dubai. The plant, which generates 25% of Dubai’s electricity, is part of the city’s efforts to diversify its energy matrix by 2030.

Corporate news

*Shares of Novocure surged approximately 22% after the US Food and Drug Administration approved Novocure’s Optune Lua portable treatment for metastatic non-small cell lung cancer.

*Shares of Morgan Stanley rose more than 3% after the bank reported quarterly results pre-market that exceeded Wall Street forecasts, driven by higher-than-expected revenue in its wealth management, trading, and investment banking operations.