The Day at a Glance | December 5 2024

The Top

• Eurozone retail sales continued to rise in October.

• A Reuters survey revealed that the European Central Bank is expected to cut the deposit rate by 25 basis points and reduce it by an additional 100 basis points throughout 2025. The survey was conducted among 75 economists between December 2^nd –and December 5^th.

• Jerome Powell, Chair of the US Federal Reserve, stated on Wednesday that the economy is stronger now than the central bank had anticipated in September, when it began cutting interest rates. He appeared to signal support for a slower pace of rate cuts in the future.

• For the week ending November 30^th, initial US unemployment insurance claims reached 224,000 (215,000 expected), up from 213,000 in the prior week.

• The collapse of the French government leaves the country without a clear path to reducing its fiscal deficit. The most likely outcome is a less aggressive adjustment than previously anticipated, Standard and Poor’s said on Thursday.

• Toyoaki Nakamura, a Bank of Japan board member, stated that the central bank must consider various economic indicators, including wages and business confidence, when making monetary policy decisions.

• Oil prices trimmed some of their gains on Thursday after a source told Reuters that OPEC+ agreed to delay a planned oil production increase until April 2025.

Economic Environment

Eurozone retail sales continued to increase in October, rising 1.9% y/y (1.7% expected), following a 3.0% y/y increase in September. This marked the fourth consecutive month of annual growth. Within retail sales, food sales rose 0.6% y/y (prev. 0.2%), non-food stores increased 2.7% y/y (prev. 5.5%), and fuel station sales rose 1.9% y/y (prev. 2.1%). Among the block’s largest economies, sales in France rose 3.6% y/y (prev. 3.2%), Germany logged a 1.0% y/y increase (prev. 4.3%), and Spain recorded a 3.8% y/y rise (prev. 4.4%). Overall, retail sales continue to rise across all segments and key countries, although the pace has recently moderated. Nevertheless, these figures contribute to the European block’s GDP recovery.

Markets and Companies

US index futures were trading positively this morning. Bitcoin surpassed $100,000 for the first time, driven by favorable expectations regarding the new Republican administration and its pro-cryptocurrency stance. Overnight, the assassination of Brian Thompson, CEO of UnitedHealth Group’s insurance unit, was reported. Meanwhile, European markets were mostly positive. In Asia, markets closed higher, while South Korea debated the possible impeachment of its president.

In the commodities market, oil prices were slightly lower ahead of the OPEC+ meeting, where an extension of production cuts for an additional three months is expected. Gold remained steady at $2,644.7 per ounce as investors awaited US employment data to be released tomorrow. Silver logged marginal declines, while platinum and palladium recorded mixed movements.

In fixed income, US Treasury yields stood at 4.16% for the 2-year note and 4.21% for the 10-year bond.

In Mexico, IPC futures are virtually unchanged. Meanwhile, the exchange rate is trading at 20.26 pesos per dollar, below yesterday´s 20.31 at market close. 

Grupo Aeroportuario del Pacífico reported November passenger traffic results. Total traffic rose 1.8% y/y, driven by international traffic (+3.5% y/y), while domestic traffic increased 0.6% y/y. However, available seat volume contracted by 1.0% y/y, and the load factor improved to 85.2% from 82.8% in November 2023.

Corporate News

• US airline JetBlue announced a series of route cuts deemed unprofitable as part of efforts to restore profitability and reduce costs.

• Apparel company American Eagle reported 3Q24 earnings that exceeded earnings-per-share (EPS) expectations. However, the company revised its annual guidance downward and cautioned about increasingly selective consumer behavior.

• Following Bitcoin’s rise above $100,000, shares of companies like MicroStrategy, Robinhood Markets, Mara Holdings, and Riot Platforms logged gains.