The Day at a Glance | April 10 2024

The Top

*In the United States, CPI inflation set at 3.5% in March. 

*In the first two months of the year, there was an income of $6.32 billion dollars from international travelers. 

*Fitch cut its outlook on China’s sovereign credit rating to negative on Wednesday, citing risks to public finances as the economy faces increased uncertainty in its transition to new growth models. 

*After issuing a warning to China regarding overinvestment in its industrial capacity, Janet Yellen faces the decision of imposing tariff sanctions. 

*The WTO said that global trade will steadily recover after an unusual decline in 2023.

*Markets record declines after March´s inflation data in the US came in higher than expected. 

Economic environment

In the United States, CPI inflation set at 3.5% in March. The Bureau of Labor Statistics (BLS) released its consumer price inflation figures for March, logging a 0.4% m/m increase. The bureau’s report highlights that half of March’s increase is due to two categories: housing and gasoline. Meanwhile, inflation excluding food and energy, i.e., core inflation, also increased 0.4% m/m in March for the third consecutive month. On an annual basis, general and core inflation were 3.5% and 3.8%, respectively.

In the first two months of the year, there was an income of $6.32 billion dollars from international travelers. In the international traveler account, which consists of income minus expenses from tourism, there was a surplus of $4.916 billion, composed of $6.32 billion in income and $1.404 billion in expenses, for the January and February 2024 period. Both the surplus and income reached historical highs since records began in 1990. A year ago, the figures were $4.645 billion, $5.808 billion, and $1.164 billion, respectively, in the same order. Income has increased by 8.8% while expenses have grown by 20.7%

Markets and companies

Markets are down. The Dow Jones is down -1.36% this morning after March inflation data turned out to be higher than expected, which would likely delay interest rate cuts expected by the Fed. The S&P 500 had been relatively stable in April as investors awaited this inflation report, following a strong start to the year where the index rose around +10%, marking its best first-quarter gain in 5 years. The yield on the 10-year Treasury, a key indicator for mortgages and other loans, rose above 4.5% as the March consumer price index accelerated from the previous month. In Europe, stocks record negative returns after US inflation data for March came in higher than expected; the Stoxx 600 posted solid gains in the morning, but fell to a loss of -0.56% following the release. Technology stocks, which are sensitive to interest rate sentiment, fell -0.8%. In Asia, markets mostly fell as Japan’s corporate inflation increased in March and decisions on interest rates from the central banks of New Zealand and Thailand are evaluated. In Mexico, the IPC is down (-0.15%), standing at $57,481 points. Regarding commodities, oil prices increased on Wednesday after two days of losses, as Israel threatened to attack Iran if the Islamic Republic attacks Israel. Lastly, cryptocurrencies log declines.

After yesterday’s trading session, the exchange rate fluctuated between a minimum of 16.31 and a maximum of 16.47, currently trading at 16.48.

Corporate news

*Nvidia’s shares fell slightly today, but the artificial intelligence company and leader of the “Magnificent Seven” officially entered correction territory on Tuesday. Shares have fallen 10% from their all-time closing high of $950 per share on March 25.

*Alibaba’s shares rose nearly 3% according to media reports indicating that co-founder Jack Ma praised the company’s management in an internal memo to employees. Ma’s optimistic note also discussed the potential of artificial intelligence.

*Delta Airlines gained 4% premarket after reporting adjusted earnings per share of 45 cents for the first quarter, beating expectations by 9 cents, according to LSEG.