The Day at a Glance | August 28 2024

The Top

• The Central Bank of Mexico will revise its macroeconomic outlook in its quarterly report.

• Bank of Japan Deputy Governor Ryozo Himinoreiterated that they will continue raising interest rates if inflation remains high. His comments support those made last week by Governor Kazuo Ueda.

• 30-year mortgage rates in the United States are at their lowest level since April 2023, at 6.44%. Over the past four weeks, they have dropped by 38 basis points.

• Oil prices fell by 1.0% on Wednesday due to fears of an economic slowdown impacting Chinese demand, although this was partially offset by concerns about lower supply from the Middle East and Libya.

• The S&P 500 logs marginal changes as Wall Street awaits Nvidia’s earnings report.

Economic Environment

The Central Bank of Mexico will revise its macroeconomic outlook in its quarterly report. This afternoon, the Central Bank of Mexico will release its April-June 2024 Quarterly Inflation Report, in which we expect the following changes: First, they will likely lower their GDP forecast for 2024 and 2025, which currently stands at 2.4% and 1.5%, respectively. These could be revised to the consensus levels of 1.7% and 1.5% for the same years. Second, they will also likely lower their formal employment creation forecast, which is currently between 510,000 and 670,000 for 2024, and between 510,000 and 710,000 for 2025. Third, we believe they may adjust the current account range for 2024, considering the fact that the trade balance is recording a much smaller deficit than last year, and tourism revenues continue to reach all-time highs. On the other hand, we do not expect changes to be made to the quarterly generaland core inflation estimates, which were revised on August 8^th in the central bank´s monetary policy announcement. In our opinion, it will be important to analyze the changes in the central bank´s macroeconomic environment in light of the latest 2Q24 GDP and current account figures, which reveal a weaker economy without significant external financing deficits.

Markets and Companies

The S&P 500 logs marginal changes as Wall Street awaits Nvidia’s earnings report. The semiconductor giant will release its quarterly results after the close; notably, it has risen 159% in 2024, raising questions about how much higher it could go. In Europe, indices are up. The Stoxx 600 was up 0.41% at 1:29 p.m. in London, with most sectors trading in the green. Mining stocks fell 1.24%, while chemicals rose 1.35%, and insurance stocks climbed 0.91%. In Asia, markets closed mixed. Hong Kong’s Hang Sengindex dropped 1.05% in its final hour of trading, while mainland China’s CSI 300 lost 0.57%, reaching a near seven-month low of 3,286.5. Regarding commodities, crude oil fell around 2% on Tuesday, and was trading at approximately $74 per barrel, as investors continue to digest the threat of supply disruptions in Libya. Metals and cryptocurrencies are down. In Mexico, the IPC is up +0.23% and stands at 52,593points.

The exchange rate stands at 19.44 after closing at 19.78 yesterday.

Grupo Aeroportuario del Pacífico (Gap) announced that the Secretariat of Communications and Transportation approved its master development plan for the 2025-2029 period. The program includes investment plans of $43.2 billion pesos for the period, as well as an upward revision of maximum tariffs.

Corporate News

• Shares of Abercrombie & Fitch, which owns the Abercrombie and Hollister brands, fell more than 9% after reporting a 21% increase in revenues during the second fiscal quarter and issuing an optimistic outlook for the current period.

• Nordstrom shares rose more than 1% after second-quarter earnings beat estimates.