The Day at a Glance | December 16 2024

The Top

• In China, consumption weakened in the second to last month of the year, while industrial production and investment set in line with consensus expectations.

• Eurozone PMI´s showed that employment fell at the fastest pace in four years as overall activity contracted. The composite PMI rose from 48.3 in November to 49.5 in December.

• Japan’s composite PMI reached 50.8 in December, up from 50.1 in November, indicating expansion in the Japanese economy.

• The European Central Bank will implement further interest rate cuts if inflation continues converging toward its 2% target, ECB President Christine Lagarde stated on Monday.

• Canada is expected to announce it exceeded its deficit target for last year when Finance Minister Chrystia Freeland presents her mid-term budget. Economists also suggested this year’s estimates could rise as spending increases.

• Oil futures dropped on Monday from their highest levels in weeks, pressured by weak consumer spending in China, the world’s largest oil importer.

Economic Environment

In China, consumption weakened in the second to last month of the year, while industrial production and investment set in line with consensus expectations. The country’s industrial production increased 5.4% year-over-year in November 2024, slightly above consensus expectations and the 5.3% observed in October. Within the figures, manufacturing expanded by 6.0% year-over-year, with notable growth in new energy vehicles (electric vehicles), which rose by 51.1% year-over-year. Retail sales in November increased by 3.0% year-over-year, well below the market’s expectation of 4.6% and the previous month’s 4.8%. Meanwhile, fixed-asset investment excluding rural assets rose by 3.3% year-over-year in the January-November period, slightly below the consensus forecast of 3.4%. Within investment data, residential construction investment plunged by -10.4%. Excluding this sector, fixed-asset investment would have increased by 7.7% year-over-year.Overall, industrial activity and investment remained stable, while consumption fell significantly short of consensus expectations. In this context, state news agency Xinhua reported that China will promote stable household income growth in 2025, intensifying fiscal support for consumers and strengthening social security.

Markets and Companies

US futures are edging higher as Wall Street prepares for this week’s Fed meeting. The stock market is coming off a weak week. The Dow lost 1.8% last week and has declined in each of the past seven sessions. The S&P 500 fell 0.6% and has retreated in four of the past five sessions. The NasdaqComposite outperformed, posting a slight weekly gain of 0.3%.

European stocks are trading lower on Monday as investors brace for the final week of central bank decisions this year. The Stoxx 600 was down 0.38% at 1:30 p.m. in London, with the automotive sector leading losses, dropping 2.68%.

In Asia, markets closed mostly lower, reversing earlier gains as investors focus on several key central bank decisions expected this week, including those from the Bank of Japan and the People’s Bank of China.

In commodities, oil futures dropped from their highest levels in weeks, pressured by weaker-than-expected consumer spending in China, the world’s largest oil importer.

Metals are up, and cryptocurrencies are logging mixed figures. In Mexico, IPyC futures are posting slight declines (-0.07%).

During the weekend, the exchange rate fluctuated between a low of 20.11 and a high of 20.17. It is currently at 20.17.

Corporate News

• Shares of Super Micro Computer dropped nearly 14% following a Friday Bloomberg report that the data center company had hired investment bank EvercoreISI to help it raise equity and debt capital. This comes after SMC missed deadlines to file its annual and quarterly financial reports. Concerns have grown that the company may be delisted from Nasdaq, despite assurances from CEO Charles Liang that this will not happen.

• Microchip shares fell 2.5% after Bank of America downgraded its rating from neutral to underperform.