The Day at a Glance | January 17 2025

The Top

• China´s economy expanded by 5.0% in 2024, meeting the target set by officials.

• According to a Reuters survey, the Fed will keep interest rates unchanged in January and resume cuts in March as it assesses new economic measures from Washington.

• On Thursday, the World Bank warned that a broad 10% tariff imposed by the US could reduce global economic growth, projected at 2.7% for 2025, by 0.3 percentage points if US trading partners retaliate with similar tariffs.

• The Bank of Japan is likely to raise interest rates next week unless market shocks arise following Donald Trump’s inauguration, and it would maintain its commitment to further hikes if the economy continues to recover.

• The Bank of Canada will soon announce the end of its balance sheet reduction program, Deputy Governor Toni Gravelle stated on Thursday.

• Oil prices rose on Friday, heading for a fourth consecutive week of gains, as the latest US sanctions on Russia’s energy trade heightened expectations of crude supply disruptions.

Economic Environment

China’s economy expanded by 5.0% in 2024, achieving the target set by Chinese officials. Official data shows primary industries grew by 3.5%, secondary industries by 5.3%, and tertiary industries by 5.0%. Growth accelerated in the last quarter, with an annualized increase of 5.4%. Industrial production rose by 5.8% year-over-year, driven by a 6.1% rate of growth in manufacturing. Retail sales increased by 3.5% year-over-year in 2024 – one of the most lagging sectors. Fixed investment, excluding rural assets, increased by 3.2%, with residential construction investment decreasing 10.6% and manufacturing investment rising by 9.2%. Despite international forecasts predicting growth closer to 4.8%, fiscal and monetary stimulus helped China achieve its 5.0% growth target. For 2025, market consensus estimates growth at around 4.5%.

Markets and Companies

In the US, stock futures were trading higher, with the main indices on track to close their best week since November´selections. Optimism stems from strong banking sector results and signs of moderating inflation. In Europe, markets are up, with London’s FTSE 100 reaching an intraday record. In Asia, indices closed mixed following China’s GDP growth announcement, which met its 2024 annual target of 5%.

In commodities, oil prices were declining. Gold traded lower at $2,707 per ounce, though it marked its third consecutive week of gains.

In fixed income, US bond yields were falling: the 10-year bond yield stood at 4.57%, and the 2-year yield at 4.22%.

In Mexico, IPC futures rose to 50,669 points, while the peso appreciated slightly, trading at 20.82 per dollar compared to yesterday´s 20.84 at market close.

Funo announced the issuance of two international bonds totaling $800 million, aimed at debt refinancing. $300 million was issued with a 12-year maturity at an 8.25% coupon, and $500 million with a 7-year maturity at a 7.7% coupon.

El Puerto de Liverpool will issue $1 billion in international debt in two tranches: $500 million at 6.255% maturing in 2032 and $500 million at 6.658% maturing in 2037. The funds will partially finance the acquisition of Nordstrom Inc., with credit ratings of BBB and BBB+ by S&P and Fitch, respectively.

Corporate News

• The seventh test flight of SpaceX’s Starship rocket ended in failure following an explosion in the upper stage. Despite the setback, Elon Musk stated that improved models are ready for future tests.

• Electric vehicle company Rivian secured a $6.6 billion loan from the US Department of Energy to build a plant in Georgia. The project will create 7,500 jobs and produce new R2 SUV and R3 models starting in 2028. Construction will begin in 2026.