The Day at a Glance | December 6 2024

The Top

• In the US, November´s employment figures setabove consensus estimates.

• The European Union and the South American Mercosur block finalized a free trade agreement, the European Commission announced Friday, though it faces a tough approval battle in Europe due to opposition from France and Italy.

• From January to November 2024, 1,350,362 vehicles were sold in Mexico (+10.68% y/y), 3,764,490 light vehicles were produced (+5.65% y/y), and 3,764,490 units were exported (+6.45% y/y) in the Mexican automotive market.

• Germany’s industrial production unexpectedly declined in October, driven mainly by a drop in energy production and the automotive sector, the Federal Statistics Office reported on Friday.

• Japanese household spending fell at a slower-than-expected pace in October. While overall consumption trends remain weak, the Bank of Japan is still expected to raise rates to normalize monetary conditions after a decade of expansionary policy.

• Oil prices fell on Friday as analysts continued to predict a supply surplus in 2025, despite OPEC+’s decision to postpone planned supply increases and extend production cuts through the end of 2026.

Economic Environment

In the US, November´s employment figures set above consensus estimates. The Bureau of Labor Statistics (BLS) reported a gain of 227,000 jobs for November 2024, exceeding the consensus estimate of 200,000 and October’s figure by 24,000 jobs. Additionally, job creation figures for September and October were revised upward by a total of 56,000 jobs across the two months. Meanwhile, the unemployment rate stood at 4.2% in November, aligning with market expectations but slightly higher than October’s 4.1%. Wage growth for the month was 4.0% year-on-year, matching September’s pace and above the consensus estimate of 3.9%. Overall, November’s employment data exceeded expectations, reinforcing the narrative of robust growth in the final quarter of the year. Furthermore, these results bolster the stance of some Federal Reserve members advocating a pause in the rate-cut cycle, given the economy’s continued strength.

Markets and Companies

Futures for major US indices started the session higher, driven by the latest US labor market data. Nonfarm payrolls exceeded expectations, reaching 227,000 jobs, reinforcing the perception of economic resilience. In Europe, markets traded up following Michel Barnier’s resignation as French Prime Minister after a no-confidence vote. Emmanuel Macron promised to appoint a new Prime Minister in the coming days. In Asia, markets closed with mixed performances.

Meanwhile, oil prices fell as OPEC+ decided to postpone production increases until April 2025, citing concerns about a potential supply glut. Gold traded higher, reaching $2,636.8 per ounce.

In fixed income, US Treasury yields declined, with the 10-year bond at 4.15% and the 2-year bond at 4.09%.

In Mexico, IPC futures rose to 51,942 points. The exchange rate stood at 20.11 pesos per dollar, compared to yesterday´s20.19 at market close.

Grupo Aeroportuario del Sureste (ASUR) reported a 7.1% year-on-year decline in total passenger traffic in Mexico for November, with domestic traffic down 7.6% and international traffic down 6.8%. In contrast, ASUR’s airports in Colombia and Puerto Rico reported increases, with rises in both domestic and international traffic in these regions.

Grupo Aeroportuario del Centro Norte reported November passenger traffic, with total passengers rising 9.9% y/y, driven by a 40.7% y/y increase in international traffic and a 5.8% y/y rise in domestic traffic.

Volaris released its November passenger traffic report, showing a 6.9% y/y drop in revenue passenger miles (RPMs) and a 3.7% y/y decrease in available seat miles (ASMs). The load factor stood at 86.8% (-3 pp y/y), while total passenger traffic declined by 6.0% y/y.

Corporate News

• Ulta Beauty and Lululemon reported results exceeding expectations, boosting their stock prices. Ulta raised its annual guidance, while Lululemon remained cautious in its fourth-quarter outlook.

• A federal judge rejected Boeing’s plea deal related to the 737 Max crashes, citing concerns with the Department of Justice’s policies.

• US oil giant Chevron announced capital expenditure cuts for 2025 amid market uncertainties.