The Day at a Glance | February 11 2025

The Top

• Mexico’s industrial production ended 2024 on a weak note.

• Federal Reserve Chairman Jerome Powell begins two days of congressional testimony on Tuesday with an economy near full employment, inflation in the process of moderating, and significant uncertainty over how these conditions will be affected by trade policies and other measures from the Trump administration, which are still in development.

• The European Union warned that it would respond with “firm and proportionate countermeasures” following US President Donald Trump’s decision to impose tariffs on all steel and aluminum imports, intensifying fears of a trade war.

• Germany’s trade surplus with the United States reached a record high, according to data from the statistics office, as both countries await details on how President Donald Trump will impose tariffs on imported goods.

• On Tuesday, Bank of England monetary policymaker Catherine Mann stated that her unexpected vote in favor of a half-percentage-point interest rate cut last week does not imply support for a series of cuts or that she would vote the same way in March.

• On Tuesday, a Hamas official said that Israeli hostages could only be released if a fragile ceasefire is upheld, rejecting the “language of threats” after US President Donald Trump warned he would “unleash hell” if they were not freed.

• Oil prices extended their gains on Tuesday amidstconcerns regarding Russian and Iranian oil supply and the threat of sanctions, despite worries that escalating trade tariffs could slow global economic growth.

Economic Environment

Mexico’s industrial production ended 2024 on a weak note. By the end of 2024, the country’s industrial activity increased 0.2%, compared to the preliminary GDP estimate of a 0.3% increase and well below the 3.4% growth recorded in 2023, based on non-seasonally adjusted figures. Within the sector, mining contracted by 4.1% y/y last year, while manufacturing, water and gas generation and distribution, and construction rose 0.3% y/y, 1.6% y/y, and 2.7% y/y, respectively. On a monthly basis, industrial production declined by 1.4% in December, following stagnation in November and a 1.3% drop in October. Across subsectors, a broad-based contraction was observed in December, with manufacturing down 1.2% m/m, mining down 1.0% m/m, water and gas generation and distribution down 1.9% m/m, and construction down 2.1% m/m. The Mexican economy’s slowdown remains underway, especially given the widespread declines on the margin and some annual variations in December already turning significantly negative. In this context, Mexico’s industrial sector entered 2025 in a very weak position.

Markets and Companies

US stock index futures trade lower as the market absorbs the potential escalation of trade tensions after D. Trump signed an order on Monday to impose tariffs on aluminum and steel imports, while the European Union indicated it could respond with tariffs on the US. Meanwhile, today marks the first of two congressional hearings for Jerome Powell; the Fed Chair may comment on the institution’s outlook regarding inflation and the potential impact of the tariff imposition.

In the debt market, US Treasury yields rise ahead of Powell’s remarks before Congress. The 2-year bond trades at 4.29%, while the 10-year bond stands at 4.53%.

In Mexico, IPC futures trade higher.

Regarding the exchange rate, the Mexican peso trades at 20.64 per dollar, having reached an overnight high of 20.66, after closing at 20.59 yesterday.

Grupo México Transportes (GMXT) released neutral quarterly results, in line with the Research team’s estimates. Revenue stood at $15.323 billion (+11% y/y), while EBITDA reached $6.260 billion (+9% y/y), with the EBITDA margin remaining at 41%.

América Móvil (AMX) will report its 4Q24 results today; we expect solid revenue growth driven by mobile services, particularly the postpaid segment, as well as corporate networks in the fixed-line segment. The depreciation of the Peso against most currencies in which it operates will have a positive effect. As for the EBITDA margin, we anticipate it will be around 40%.

Corporate News

• Coca-Cola shares rose after the company reported better-than-expected quarterly results in both revenue and earnings.

• DuPont de Nemours reported quarterly earnings per share of $1.13, exceeding the consensus estimate of $0.98. The stock was up nearly 5% pre-market.

• Despite reporting better-than-expected revenue, Shopifyshares fell 3% pre-market.