The Day at a Glance | April 24 2025

The Top

● In Mexico, inflation accelerated in the first half of April.

● Officials from the Trump administration are considering tariff exemptions for certain auto parts imports. The aim is to ease costs for the automotive industry and support its relocation of production to the U.S.

● On Thursday, China called for the removal of all “unilateral” tariffs imposed by the U.S., amidst signs pointing to a possible de-escalation of the trade war by the Trump administration.

● For the week ending April 19^th, 2025, initial jobless claims in the U.S. stood at 222,000, in line with market consensus and up from 216,000 the previous week.

● Germany´s government lowered its economic growth forecast on Thursday and now expects stagnation in 2025, instead of the previously forecasted 0.3% expansion, due to growing uncertainty from global trade disputes that threaten to dampen growth and weaken investment.

● The Bank of Japan is likely to delay future interest rate hikes, as the uncertainty caused by U.S. tariffs has heightened downside risks to both growth and inflation, according to a senior IMF official on Wednesday.

● Oil prices recovered some of their losses on Thursday, as investors weighed a potential production increase by OPEC+, conflicting signals from the White House on tariffs, and ongoing nuclear negotiations between the U.S. and Iran.

Economic Environment

In Mexico, inflation accelerated during the first half of April. INEGI reported that the National Consumer Price Index (CPI) for the first half of April recorded a biweekly increase of 0.12%, slightly above the market consensus estimate of 0.10%. On an annual basis, headline inflation stood at 3.96% (previous: 3.67%). Core inflation — which excludes the most volatile items such as energy, agricultural products, and government-set prices — rose 0.34% q/q, surpassing the 0.20% estimate. On an annual basis, core inflation reached 3.90%. By component, goods rose 3.28% y/y and services 4.60% y/y. Overall, inflation in the first half of April accelerated more than expected, mainly due to a rebound in the core component. Nonetheless, it remains within the central bank´s target range of 3% ±1 percentage point, marking the eighth consecutive biweekly figure within said range. Looking ahead, inflation could face renewed upward pressures due to tighter U.S. trade policies and seasonal factors.

Markets and Companies

U.S. stock indexes are mixed this morning amidst renewed trade tensions between the U.S. and China. Despite comments from President Trump, Chinese authorities ruled out any active negotiations, dampening market expectations.

In Europe, markets were trending lower, while in Asia, equities closed in positive territory.

In commodities, oil prices rebounded following new U.S. sanctions on Iran’s energy sector. Uncertainty remains over a potential production increase by OPEC in June. Meanwhile, gold resumed its upward trend, trading at $3,314 per ounce.

In fixed income, U.S. Treasury yields declined: the 10-year yield stood at 4.33%, and the 2-year at 3.81%. In Mexico, the IPC index was trading slightly lower at 55,705 points, while the exchange rate stood at 19.59 pesos per dollar, after closing at 19.63 in the previous session.

During 1Q25, Alfa’s revenues at constant exchange rates declined 5% y/y, while comparable EBITDA dropped 14% y/y at the consolidated level and 17% for Sigma. Results came in below our expectations. Sigma’s EBITDA totaled $220 million USD, down 17%, mainly due to the impact of the peso depreciation on operations in Mexico and higher raw material costs. At constant exchange rates, it would have decreased 5%.

In 1Q25, Fibra Monterrey reported a 39.5% y/y increase in revenues, while Net Operating Income (NOI) rose 40.3% y/y and Funds From Operations (FFO) grew 50.0% y/y. Results exceeded our estimates, and we consider the report to be positive. The distribution for the quarter will be $0.268 per CBFI, which represents a 2.3% yield at the latest price and a 9.2% annualized yield. Gross Leasable Area (GLA) increased 14.5% y/y, reaching 1.9 million m², reflecting the impact of acquisitions. Portfolio occupancy closed at 95.3%, down from 96.2% in 1Q25.

In 1Q25, Gentera’s total loan portfolio reached MXN 82.725 billion, signaling 26.3% annual growth. Net interest margin, before provisions, grew 24.3% y/y, and controlling net income rose 49.2% y/y. Results came in above expectations, and we see a positive implication from the report.

During 1Q25, Nemak’s revenues rose 0.2% y/y, while operating cash flow increased 2.9% y/y. Results were in line with expectations on the revenue side (0.2%e) and slightly above on cash flow (0.0%e), so we see a neutral implication from the report; however, volume performance remained weak, with a 7.3% y/y decline.

Arca Contal released its quarterly results this morning, which were largely in line with our estimates. Net sales rose 12.4% (vs. 12.5%e), mainly driven by pricing strategies and favorable exchange rate effects, while volume declined 3.7%. As for EBITDA, profit increased 10.2% (vs. 9.5%e).

Corporate News

• Airline stocks retreated following a series of downward revisions to their financial outlooks. American Airlines joined Delta and Southwest in lowering its 2025 guidance, citing economic uncertainty and a slowdown in travel demand in the U.S. The pullback in demand and limited visibility on the economic environment are prompting airlines to adopt a more cautious stance.

• PepsiCo cut its profit growth forecast for the year. Although first-quarter revenues exceeded expectations, margins remain pressured by a more cautious consumer and the impact of new tariffs.