The Day at a Glance | October 30 2024

The Top

• The US economy recorded solid growth in the third quarter, just ahead of the presidential elections.

• Mexico´s economy grew more than expected in the third quarter. 

• The Eurozone’s GDP expanded by 0.9% year-on-year in the third quarter of 2024, its best performance since the first three months of 2023, compared to a 0.6% increase in the previous quarter and above the consensus expectations of 0.8%, as indicated by preliminary estimates.

• Kamala Harris and Donald Trump will deliver some of their final campaign speeches to voters on Wednesday in North Carolina, a swing state with a Democratic governor who has backed Republican presidential candidates for over a decade.

• Private sector jobs in the US added 233,000 workers to payrolls in October 2024, the highest increase since July 2023, following a revised upward rise of 159,000 in September and significantly exceeding expectations of 115,000.

• On Wednesday, the new UK Chancellor of the Exchequer, Rachel Reeves, will announce what could be the largest tax increases in three decades, in an attempt to fix the country’s struggling public services, along with billions in additional loans to reform the economy.

• Oil prices rose more than 2% on Wednesday after Reuters reported that OPEC+ might delay a planned increase in oil production set to take effect in December by a month or more due to concerns over weak oil demand and rising supply.

Economic Environment

The US economy recorded solid growth in the third quarter, just ahead of the presidential elections. Economic activity in the US grew at an annualized and seasonally adjusted rate of 2.8% in the third quarter of 2024, according to the first of three estimates from the Bureau of Economic Analysis (BEA). Thus, the Q3 2024 reading forUS GDP set below market expectations of 3.0% and the previous quarter’s 3.0% growth. Growth was primarily driven by an increase in consumer (3.7% vs. 2.8% previously) and government spending (5.0% vs. 3.1% previously), while private inventories decreased by 0.17 percentage points (pp), after having added 1.05 pp in Q2 2024. Overall, the US economy maintained a strong growth pace in the third quarter, fueled by declining inflation and strong wage increases, which boosted consumer spending ahead of the presidential elections.

Mexico´s economy grew more than expected in the third quarter. The economy grew by 1.0% quarter-on-quarter in Q3 2024, according to timely and seasonally adjusted figures. The timely figure set above the market consensus estimate of 0.8% quarter-on-quarter. The adjustment was due to a 4.6% increase in the primary sector, while the secondary and tertiary sectors recorded growth of 0.9%. In its year-on-year change, timely GDP growth for the third quarter was 1.5%, and was backed by the following increases: 2.0% in the tertiary sector, 0.6% in the secondary sector, and 4.1% in the primary sector. For the first nine months of 2024, the economy grew by 1.7%, also according to original figures.

Overall, Mexico´s economy recorded better-than-expected growth in the third quarter, primarily driven by the primary sector.

Markets and Companies

The S&P 500 is practically unchanged as investors digest a wave of corporate reports and wait for more updates from major technology companies. Alphabet exceeded expectations with strong cloud revenue growth, while AMD fell 8% in pre-market trading after a disappointing revenue forecast. European markets declined as investors assessed corporate results, growth data, and the UK budget. The Stoxx 600 dropped 1.4%, with most sectors in negative territory. Technology stocks led the losses, down 2%. In Asia, Hong Kong’s Hang Seng fell 1.65% in its last hour of trading, and China’s CSI 300 closed down 0.90%, ending at 3,889.45. 

Regarding commodities, oil prices rose more than 2% on Wednesday after reports suggested that OPEC+ might delay the planned December production increase due to concerns about low demand and high supply. 

Meanwhile, gold reached an all-time high and is currently trading at $2,772.88 dollars per ounce. 

The exchange rate stands at $20.17 after closing at $20.07 yesterday.

In Q3 2024, Funo reported a year-on-year revenue growth of 11.0% and a year-on-year increase of 7.6% in Net Operating Income (NOI). The results set slightly above our expectations. Funds from Operations (FFO) increased by 2.8% year-on-year. The distribution for the quarter will be $0.5250 per certificate (CBFI). The distribution yield, based on the latest closing price, is 2.3% or 9.0% on an annualized basis.

In Q3 2024, Gfnorte reported a year-on-year portfolio growth of 11.4%, while the financial margin before considering reserves increased by 8.5% year-on-year and net profit grew by 7.3% year-on-year. The report set in line with our expectations and those of the consensus, resulting in a neutral implication.

Industrias Peñoles reported its Q3 2024 results, showing a 14.9% year-on-year growth in sales, driven by increases in the prices of key metals like gold and silver.EBITDA reached $587 million (+454% year-on-year), surpassing consensus estimates and reflecting a solid margin of 33.9%.

Corporate News

• Alphabet’s shares rose nearly 7% after strong third-quarter results that exceeded Wall Street’s estimates for both revenue and earnings.

• Super Micro Computer’s shares dropped more than 30% after revealing that an auditor resigned. The auditor from Ernst & Young had disagreed with the firm for months over its governance and board independence.