The Day at a Glance | January 28 2025

The Top

• Demand for durable goods in the US increased by 1.5% in 2024, excluding the most volatile categories.

• The US Senate confirmed Scott Bessent as President Donald Trump’s Treasury Secretary, giving him a key role in implementing tax cuts, public spending, and managing economic relations.

• According to Reuters, the Trump administration has temporarily suspended grant, loan, and other financial assistance programs, drawing criticism from Congressional Democrats.

• Germany’s economy is in a deep crisis, with a potential GDP contraction of -0.1% in 2025, according to the BDI industry association. This would mark three consecutive years of declining growth.

• ECB President Christine Lagarde warned that central bank independence is being challenged in some regions, with increased political influence potentially complicating inflation control and increasing economic volatility.

• The Bank of Japan is likely to raise interest rates again around June or July, aiming to increase its policy rate to at least 1.5% within the next two years, former BOJ board member Makoto Sakurai stated on Tuesday.

• Oil prices rose slightly on Tuesday but remained near a two-week low due to weak economic data from China and rising temperatures elsewhere, which dampened demand prospects.

Economic Environment

Demand for durable goods in the US increased by 1.5% in 2024, excluding the most volatile categories. In December, durable goods orders decreased by -2.2% m/m, following a -2.0% decline in the prior month. However, excluding volatile categories such as transportation and defense, demand expanded by 0.3% in December 2024, according to seasonally adjusted figures. In the same period, demand for transportation goods dropped by -7.4% m/m, while defense-related goods rose by 0.7% m/m. On an annual basis, original figures show that demand for durable goods decreased by -3.8% in December 2024, but excluding transportation and defense, it rose by 1.9%. From January to December 2024, demand for durable goods fell by -1.5% compared to the same period a year earlier. However, excluding volatile categories, it expanded by 1.5% during the same period. Overall, investment in durable goods logged growth in core categories, while more volatile sectors posted declines. For example, transportation dropped by -6.9% and defense fell by -3.1% over the course of last year.

Markets and Companies

Futures for the main US stock indices are rebounding after yesterday’s significant drop in the technology sector, following news of artificial intelligence developments by Chinese startup DeepSeek and its potential implications for the industry. The market´s reaction occurred in a context of high valuations, making the sector more vulnerable to downward adjustments.

Today, the Federal Reserve’s monetary policy meeting begins and will conclude tomorrow. The Fed is expected to leave its benchmark rate unchanged, with market attention focusing on the accompanying statement.

On the corporate front, Starbucks is set to release its earnings report after the market closes, while Meta, Microsoft, Tesla, and Apple are scheduled to report in the coming days.

In the debt market, US Treasury yields are rising ahead of the Fed’s monetary policy decision. The 2-year bond is trading at 4.22%, and the 10-year bond at 4.57%.

In Mexico, IPC futures are trading higher.

As for the exchange rate, the Mexican peso is trading at 20.64 per dollar, after reaching a high of 20.78 overnight.

In 4Q24, Regional recorded 14.0% y/y growth in its loan portfolio, while the default rate closed at 1.3%. The financial margin, before provisions, increased by 11.6% y/y, and net income increased by 4.4% y/y. Results set in line with expectations, leading us to view the report as having a neutral implication.

Corporate News

• Nvidia shares were up nearly 3% pre-market, recovering from yesterday’s 17% drop triggered by news of DeepSeek’s AI developments at a lower cost compared to competitors. Other stocks in the sector were also rebounding before the market opened.

• Boeing reported results below consensus expectations, with a larger-than-expected loss per share.

• General Motors posted results slightly above consensus estimates. For the year, it expects earnings per share between $11 and $12, compared to the consensus estimate of $10.86.