Daily Brief | August 5 2025

Top News

·     In Mexico, private consumption and gross fixed investment continue to show weakness.

·     Later today, the ISM services index for July will be released, which the market consensus estimates will be 51.5 points.

·     Producer prices in the Eurozone rose 0.6% y/y in June, in line with market consensus expectations and up 0.3% y/y from the previous month.

·     Donald Trump ruled out Scott Bessent, Secretary of the Treasury, as a candidate to be the next Fed chair and replace Powell.

Economic Outlook

In Mexico, private consumption and gross fixed investment continue to show weakness. In May, private consumption fell by 1.0%, after growing by 0.9% in April and declining by 0.2% in March, according to monthly and seasonally adjusted figures. In annual terms, private consumption fell by 0.9% in the fifth month of the year, showing a decline of 0.7% in domestic goods and growth of 1.3% in services, while imported goods fell by 5.3%. On the other hand, gross fixed investment advanced 0.9% at a monthly rate, after falling -1.6% in the previous month, according to seasonally adjusted figures. In its annual comparison, investment fell -6.7%, also according to seasonally adjusted figures. Within this, construction and the acquisition of machinery and equipment fell by -5.0% and -8.2%, respectively. Overall, economic activity figures for May were weak, as consumption returned to weakness in May and investment improved due to an atypical rebound in residential construction.

Markets and Stocks

US stock index futures are trading higher on Tuesday, following the rally seen in the previous session, driven by a strong reaction to corporate reports. However, optimism moderated after statements by President Donald Trump, who anticipated the imposition of new tariffs on the semiconductor and pharmaceutical sectors, which generated caution among investors. At the corporate level, Palantir’s performance stands out, with its shares rising more than 6% after exceeding $1 billion in annual revenue for the first time. In contrast, Caterpillar reported lower-than-expected results and its shares are trading lower. This week has started on a more optimistic note for the market, after fears of new trade measures and a weak jobs report at the end of last week triggered widespread profit-taking. Investors are keeping an eye on quarterly results to be released at the end of the day, including Snap, AMD, and Rivian. More than 81% of S&P 500 companies that have reported so far have exceeded consensus expectations.

Treasury bond yields are showing marginal upward movements as the market assesses President Trump’s comments and awaits the release of the July services indicator. The 10-year bond yield is up nearly 2 basis points to 4.2%, and the 2-year yield is up to 3.7%.

Oil prices are trading lower amid increased OPEC production for September and concerns about a possible slowdown in global demand. Gold, meanwhile, is down slightly by 0.2%, pressured by the strengthening dollar, although it remains near two-week highs on expectations of a cut in the Federal Reserve’s benchmark rate in September.

Corporate News

– Palantir Technologies surpassed $1 billion in quarterly revenue for the first time and improved its annual guidance. Both second-quarter earnings and revenue exceeded market expectations.

– Pfizer reported better-than-expected quarterly results and raised its full-year earnings forecast.

– MercadoLibre reported quarterly earnings below market consensus, with earnings per share of $10.31 compared to analysts’ expectations of $11.93, which generated a negative reaction in the market.