The Day at a Glance | January 16 2025

The Top

• In the US, retail sales increased at a solid pace in 2024.

• Federal Reserve officials noted that US inflation continues to moderate, though they highlighted growing uncertainty in the coming months as they await a first glimpse of policies under the incoming Trump administration.

• According to the ECB minutes, it was necessary to cut interest rates in December cautiously and gradually. However, they also acknowledged that further monetary policy easing is likely in the future.

• As reported by the Ifo Institute, Germany’s price expectations index rose in December to its highest level since April 2023, with all economic sectors contributing to the increase.

• The UK economy resumed growth in November, the first month after Finance Minister Rachel Reeves announced significant corporate tax hikes. However, the expansion was below expectations (0.1% vs. 0.2% expected).

• According to Reuters, the Bank of Japan is expected to raise interest rates again during one of the two meetings scheduled this quarter, bringing them to 0.50%, with January being the preferred timing among most surveyed economists.

• Oil prices edged down slightly on Thursday, a day after hitting multi-month highs following US sanctions against Russia and a sharper-than-expected drop in US crude inventories.

Economic Environment

In the US, retail sales increased at a solid pace in 2024. In December, retail sales rose by 0.4% m/m, below expectations of a 0.6% m/m increase but above the 0.2% m/m rise logged in the previous month. Excluding volatile categories such as autos and gasoline, retail sales were up 0.3% m/m in December, following a 0.2% m/m increase in November. On an annual basis, retail sales rose by 3.9%, while sales excluding autos and gasoline increased by 3.3%. For the entirety of 2024, retail sales increased by 3.0%, and sales excluding autos and gasoline rose by 3.9%. Within retail sales, online sales stood out with an 8.2% increase during the year, while sales of home furnishings decreasedby 2.2%. Overall, retail sales logged solid growth, signalingthat the economy started 2025 with strong momentum. 

Markets and Companies

US index futures logged positive figures this morning following yesterday’s solid rally; the main indices had their best day since November. This performance was driven by the latest inflation report and quarterly results from the banking sector. Bank of America and Morgan Stanley exceeded expectations in their fourth-quarter earnings reports.

In Europe, markets were trading higher, with notable gains from companies like LVMH and Hermès. Meanwhile, in Asia, markets closed in positive territory. The Bank of Korea opted to keep its interest rate at 3%, defying expectations of a 25-basis-point cut.

In the commodities market, oil prices declined after reaching multi-month highs, driven by an increase in US exports and fears of slower global growth, despite a drop in US crude inventories. On the other hand, gold increased to $2,714 per ounce.

In fixed income, yields on US Treasury bonds stood at 4.67% for the 10-year note and 4.27% for the 2-year note.

Meanwhile, IPC futures traded higher at 50,901 points. As for the exchange rate, it stood at 20.61 pesos per dollar, compared to yesterday´s 20.47 at market close. 

Corporate News

• BP announced a decrease of 4,700 jobs as part of its plan to save $2 billion by 2026.

• Spirit Airlines will cut approximately 200 jobs, aiming for savings worth $80 million after filing for Chapter 11 bankruptcy.

• Morgan Stanley reported revenues worth $16.2 billion, surpassing the $15 billion forecast, with earnings per share (EPS) of $2.20, beating the $1.70 consensus estimate. 

• Bank of America reported revenues totaling $25.5 billion and EPS worth $0.82, exceeding estimates of $25.2 billion and $0.77, respectively.