The Day at a Glance | April 1 2024

The Top

*PCE inflation edged slightly up from 2.4% y/y in January to 2.5% y/y in February 2024.

*Quarterly Exports by Federal Entity (ETEF for its acronym in Spanish) for the fourth quarter of 2023 were published in Mexico.

*The US ISM manufacturing index will be published later today, with the consensus estimating a level of 48.4 points.

*Today, March´s IMEF indicator will be published, as well as the country´s Manufacturing PMI (52.5e vs 52.3 prev.).

*Industrial activity in Asia is plummeting despite signs of recovery in China and South Korea.

*Oil remains near five-month highs due to expected supply shortages.

*Stocks in the US show slight changes at the beginning of the second quarter. 

Economic environment

The Fed’s preferred indicator for tracking inflation ticked up slightly to 2.5% in February. In the United States, personal disposable income and personal consumption expenditure grew by 0.3% and 0.8%, respectively. Meanwhile, the annual inflation rate for personal consumption expenditure (PCE), the indicator the Federal Reserve uses to set its monetary policy, rose to 2.5% in February, in line with market estimates, from 2.4% in January. Core PCE inflation stood at 2.8% in February vs 2.9% the previous month. Thus, Jerome Powell said on Friday that the latest inflation data from the United States is “in line with what we would like to see.” Both indicators are still above the Federal Reserve’s 2% inflation target.

Quarterly Exports by Federal Entity for the fourth quarter of 2023 were published in Mexico, highlighting that the entities with the highest contributions were: Chihuahua with 13.2%, Coahuila with 12.0%, Nuevo León and Baja California with 10.4%, Guanajuato with 7.2%, and Tamaulipas with 6.3%. The rest of the country contributed 40.5%. In year-on-year comparison for the October-December 2023 period, there was notable growth in the value of exports in dollars in states such as San Luis Potosí (+31.5%), Quintana Roo (+21.2%), Guerrero (+20.0%), Aguascalientes (+19.4%), and Guanajuato (+19.0%). Regarding economic activity, the transport equipment sector accounted for 41.2%, and the states with the largest contributions were Coahuila, Guanajuato, Nuevo León, Chihuahua, and San Luis Potosí, accounting for 58.6% of the sector´s total value. Export values for federal entities are assigned considering that the production state is the same as the exporter, according to INEGI methodologies.

Markets and companies

Stocks in the US show slight changes at the beginning of the second quarter. The main indices come from a winning first quarter. The S&P 500 increased 10.2%, recording its best first-quarter performance since 2019, while the Dow Jones increased 5.6%. The Nasdaq grew 9.1%. Today, stocks in the US show slight changes as Wall Street begins the second quarter, and investors assess new inflation data; the personal consumption expenditures price index (excluding food and energy), released on Friday during the market closure for Good Friday, showed that inflation rose 2.8% in February, in line with expectations. Additionally, Powell said on Friday that monetary policymakers do not need to rush to cut interest rates with still strong economic growth and inflation above target levels. In Europe, stocks recorded gains of around 7% for the first quarter as inflation has become more moderate. The Stoxx 600 index closed 0.23% higher on Thursday, after reaching another historical high in March. It was its best quarter in a year, according to LSEG data, and the best month since December 2023. Markets will remain closed for Easter Monday, and most operations in the region won´t resume until Tuesday. In Asia, stocks in China rose on Monday while investors assessed the country’s business activity; and stocks in Japan closed lower as business optimism decreased. In Mexico, the IPC is slightly up (+0.26%), standing at 57,520 points. Regarding commodities, crude oil futures fell slightly on Monday, taking a breather after a strong first quarter; the WTI and Brent indexes logged three consecutive months of gains. WTI has risen 15.5% year-to-date while Brent has risen 12.3%. Since Wednesday’s trading session, the exchange rate has fluctuated between a low of 16.54 and a high of 16.62, currently trading at 16.57. 

Gfinbur reported that on March 31st, 2024, the acquisition process by Banco Inbursa of 80% of the capital of Cetelem, S.A. de C.V., SOFOM, E.R. (“Cetelem México”), a subsidiary of BNP Paribas Personal Finance in Mexico, was concluded. Government approvals are still pending.

Corporate news

*3M shares rose nearly 3% on Monday. The company completed its spinoff of the healthcare company Solventum and announced a $10 billion settlement with public water suppliers in a chemicals lawsuit that received final approval.

*AT&T shares fell more than 2% after the company announced it was investigating a data leak that resulted in the publication of information from more than 7 million customers on the dark web.

*MicroStrategy shares fell more than 5% after the CEO sold nearly 4,000 shares of the company last week.

*Tesla shares rose less than 1% after its previously announced price increase on the Model Y came into effect on Monday.