The Day at a Glance | April 16 2024

The Top

*China’s economy recorded a solid growth rate of 5.3% in the first quarter of 2024. 

*In the U.S., industrial production grew in line with market expectations during March. 

*The International Monetary Fund estimates that the global economy will grow by 3.2% in 2024 and 2025, according to the April World Economic Outlook. 

*In Mexico, the Timely Indicator of Private Consumption (IOPC for its acronym in Spanish) estimates that consumption will grow by 3.3% year-on-year in February and 3.4% year-on-year in March, respectively. 

*The Israeli war cabinet will meet for the third time to respond to Iran’s attack. 

*Oil prices fall as concerns about supply risks in the Middle East diminish. 

*The Dow Jones Index is in positive territory after solid quarterly results. 

Economic environment

China’s economy recorded a solid growth rate of 5.3% in the first quarter of 2024. For 1Q24, consensus estimated growth at 5.0%, after closing the last quarter of 2023 with growth of 5.2%. By sectors, agriculture grew by 3.8% year-on-year, industrial production by 6.1% year-on-year, and services by 5.0% year-on-year. Gross fixed investment grew by 4.5% in the first three months of the year (previous 4.2%), which is 1.5 percentage points higher than the same period in 2023, despite the collapse of the real estate sector by -9.5% year-on-year. If this depressed sector is eliminated, private investment grew by 7.7%. Regarding the labor market, the urban unemployment rate stood at 5.2% in 1Q24, which is -0.3 percentage points lower than a year ago. On the other hand, economic indicators for March showed that industrial production increased by 4.5%, significantly decelerating from the 7.0% observed in the January-February period (estimated 6.0%), while retail sales grew by 3.1% in March, below market expectations of 5.0% growth. In summary, the strong start of the economy in the first quarter aligns with the 5.0% target set for 2024; however, Chinese officials acknowledge that the environment has become more complex, severe, and uncertain, so it is still not possible to declare that a situation of stable and solid growth has been achieved. 

In the U.S., industrial production grew in line with market expectations during March. The industrial sector grew by 0.4% on a monthly basis, in line with consensus estimates, however, on an annual basis, it recorded a decline of 1.8% in the first quarter of 2024. In March, manufacturing grew by 0.5%, partly driven by 3.1% month-on-month growth in vehicles and auto parts. Mining fell by 1.4% month-on-month, and utilities grew by 2.0% month-on-month. Industry capacity utilization stood at 78.4% in March, 1.2 percentage points below its long-term average level (1972-2023), suggesting there were few inflationary pressures on the cost side. The recovery of industrial production in March – and especially in manufacturing – suggests that we should see good export figures in Mexico´s economy.

Markets and companies

Global markets with mixed sentiment. Main US indices closed the previous day with losses. This morning, markets kicked off the trading session mixed: Dow +0.21%, S&P +0.05%, and Nasdaq -0.08%. In Europe, the Stoxx index recorded a decline of -1.28%, with mining stocks leading losses, falling by -2.7% together with financials, which dropped by -2.1%. In Asia, markets recorded a contraction: Japan’s Nikkei 225 fell by -1.94%, reaching its lowest level in almost two months, and China did the same in -1.65%. In Mexico, the IPC opened higher, standing at $56,066 points (+0.15%). Oil recorded a decline as the United States expects a limited response from Israel, reducing fears that the Middle East is on the brink of a wider war, with the price at $85.16 per barrel (-0.30%). Natural gas is up (+0.30%). Meanwhile, metals mostly declined, with gold -0.4%, silver -2.3%, and copper -1.9%. Lastly, cryptocurrencies are down.

The exchange rate fluctuated during the early hours, reaching a low of 16.70 and a high of 16.95 at 7:00 a.m., currently trading at 16.99.

Livepol acquired the majority of shares in the Altama City Center shopping mall in Tampico, Tamaulipas. Through a statement sent to the Mexican Stock Exchange (BMV for its acronym in Spanish), Livepol announced that on March 15th, it acquired the majority of shares in the Altama City Center shopping mall in the city of Tampico, Tamaulipas. Therefore, as of this date, this shopping center is integrated into the portfolio of assets managed by El Puerto de Liverpool. According to the statement, this is the most important shopping center in the southern part of the state and features important “anchor” stores such as Liverpool and Suburbia.

Corporate news

*UnitedHealth rose +7.0% after reporting better-than-expected first-quarter earnings.

*Johnson & Johnson reported mixed quarterly results, and shares fell nearly 1%.

*Morgan Stanley rose nearly 4% after beating analyst consensus expectations.

*Bank of America also exceeded expectations for the quarter, leading shares to rise more than 2%.