The Day at a Glance | December 9 2024

The Top

• In Mexico, November´s inflation continued to decline, primarily due to the effects of the “Buen Fin” sales event. We estimate inflationwill set at 4.21% at the end of 2024. 

• In China, consumer prices reached a five-month low in November, while producer price deflation persisted.

• US President-elect Donald Trump stated in an interview that he will not seek to replace Federal Reserve Chairman Jerome Powell when he takes office in January.

• In the Eurozone, investor confidence fell in December to its lowest level in over a year, according to a Monday survey. Germany remains a drag on the block, as February’s snap elections failed to inspire confidence.

• Japan’s economy expanded at a faster pace in 3Q24 than initially reported, keeping market expectations alive for a short-term interest rate hike by the central bank.

• Syrian rebels announced on Sunday that they had overthrown President Bashar al-Assad, ending a 50-year family dynasty in a lightning offensive that sparked fears of a new wave of instability in an already war-torn region.

• Oil prices rose more than 1% on Monday after China, the largest importer, announced its first step toward a looser monetary policy since 2010 to boost economic growth, as reported by state media citing a Politburo meeting.

Economic Environment

In Mexico, November´s inflation continued to decline, primarily due to the effects of the “Buen Fin” sales event. We estimate it will set at 4.21% at the end of 2024. According to INEGI, the National Consumer Price Index for November logged a monthly variation of 0.44%, nearly in line with our estimate of 0.42% and below the consensus estimate of 0.49%. Annually, November’s general inflation was 4.55% (prev. 4.76%). Core inflation, which excludes volatile items like energy and agricultural products and government-regulated tariffs, rose by 0.05%, virtually identical to our forecast and consensus estimates of 0.06% and 0.07%, respectively. On an annual basis, core inflation stood at 3.58% (prev. 3.80%). By components, goods prices fell -0.27% m/m and 2.31% y/y, while services increased 0.35% m/m and 4.90% y/y. Meanwhile, non-core inflation rose 1.73% m/m and 7.60% y/y. Overall, inflation figures signal the impact of the Buen Fin, which primarily influenced non-food goods and largely explains the decline in core inflation. However, general inflation pointed to an upward seasonal effect due to the end of summer electricity subsidies in 11 cities across the country. We estimate that by year-end, general inflation will reach 4.21%, while core inflation will set at 3.56%.

In China, consumer prices reached a five-month low in November, while producer price deflation persisted. Annual consumer inflation rose 0.2% y/y in November 2024, below market expectations of 0.5% y/y. On a monthly basis, consumer inflation in November stood at -0.6%, following a -0.3% decline in the previous month. Producer price inflation for November was -2.5% y/y, a slighter drop compared to October and the consensus estimate of -2.9%. Overall, consumer inflation in China hit a five-month low in November, while producer price deflation continued despite recent economic stimulus packages. The Asian giant still faces low inflation challenges and cloudy forecasts, particularly due to the possibility of a new round of tariffs from Donald Trump early next year.

Markets and Companies

Nasdaq futures are down today after the S&P 500 and Nasdaq logged their third consecutive week of gains; investors await key inflation data to be released this week.

European markets are slightly up as investors assess geopolitical instability. The Stoxx 600 was up 0.19% at 1:22 p.m. in London, with the main regional sectors recordingmixed performance.

In Asia, Hong Kong stocks rose nearly 3% following China’s promises of “more proactive” stimulus measures.

In commodities, oil prices are rising after China, the largest importer, indicated its first move toward a more flexible monetary policy since 2010 to stimulate economic growth.

Metals are up, while cryptocurrencies are declining. In Mexico, IPC futures remain stable (0%).

Over the weekend, the exchange rate fluctuated between a low of 20.27 and a high of 20.12. It currently stands at 20.12.

Corporate News

• Nvidia shares fell 2% after China announced that a regulatory body had launched an investigation into the chipmaker. According to the Chinese government, the State Administration for Market Regulation is examining possible violations of antimonopoly laws.

• Palantir Technologies shares rose more than 6% after the software platforms company announced the expansion of its contract with the U.S. Special Operations Command to develop artificial intelligence mission management. The contract is valued at nearly $37 million.