The Day at a Glance | August 29 2024

The Top

• In the US, 2Q24 growth was revised up from 2.8% to 3.0%.

• In the week ending August 24^th, initial unemployment insurance claims stood at 231,000, marking a slight decrease of 2,000 compared to the previous week’s 232,000.

• Inflation in Germany fell more than expected in August, reaching its lowest level in more than three years, easing pressure on the European Central Bank to cut interest rates in September.

• China’s central bank announced it bought special government bonds from primary dealers on Thursday, its first such purchase in nearly two years, sparking speculation that it´s preparing to intervene in the domestic debt market.

• The Japanese government has upgraded its economic outlook for the first time in over a year, citing signs of improvement in consumption, boosting optimism for a broader recovery.

• Oil prices stabilized on Thursday after two declining sessions, as concerns over Libyan supply helped offset a smaller-than-expected drop in US crude inventories, which tempered demand expectations.

Economic Environment

In the US, 2Q24 growth was revised up from 2.8% to 3.0%. According to the second of three estimates from the Bureau of Economic Analysis (BEA), 2Q24 GDP increased by 0.2 percentage points to 3.0% on a seasonally adjusted annualized basis. The GDP revision was due to higher private consumption than originally estimated, while the other components were slightly revised down. On an annual basis, the economy grew by 3.1% in 2Q24, after expanding by 2.9% in 1Q24, 3.1% in 4Q23, and 2.9% in 3Q23, showing that the economy remains strong. In this context, private consumption grew by 2.7% year-on-year, gross fixed investment by +4.0% year-on-year, exports by +3.4% year-on-year, government consumption by +3.7% year-on-year, and imports by +4.9% year-on-year. Currently, the Atlanta Fed´s GDP Now model estimates that the US economy could grow by 2.0% during 3Q24, indicating a slight moderation compared to the growth seen in the first half of this year.

Markets and Companies

US markets are logging slightly positive changes as they digest Nvidia’s quarterly results, which were released yesterday. Although the company exceeded EPS expectations ($0.68 vs. $0.64), its shares are down this morning. In economic news, US annual GDP growth for 2Q24 was revised up to 3.0% from the previous estimate of 2.8%, while weekly unemployment insurance claims remained relatively unchanged. This has eased fears of a potential recession in the US. In Europe, markets remain positive following the release of annual inflation data in the European Union, which fell more than expected. Similarly, preliminary inflation in Spain also declined, setting at 2.4% in August. In Asia, markets are down, with South Korean and Taiwanese tech companies leading losses.

Regarding commodities, oil prices are stabilizing after two sessions of losses. Concerns about Libyan supply, a smaller-than-expected decline in US crude inventories, and growing geopolitical tensions have been the main factors driving oil prices. Meanwhile, gold prices are logging a slight rise.

In fixed income, US bonds are recording slight variations, with the 10-year bond yielding 3.87%, and the 2-year bond yielding 3.89%.

In Mexico, the IPC is up and stands at 52,558.4 points.

The exchange rate is at 19.87, after closing at 19.64 yesterday.

Corporate News

• Software company Salesforce exceeded expectations in its second-quarter earnings report and maintains a positive outlook for the rest of the year; as a result, its shares are up nearly 5%.

• Shares of HP Inc. are down 3% after falling short of analysts’ expectations in its latest quarterly report.

• In addition to its earnings report, Nvidia announced a $50 billion share buyback.

• Cybersecurity company CrowdStrike missed analysts’ expectations for its third quarter, causing its shares to drop around 2%.