The Day at a Glance | February 16 2024

The Top

*The Federal Economic Competition Commission (COFECE) authorized the acquisition of Iberdrola’s 13 power plants by the National Infrastructure Fund (FONADIN).

*Producer prices in the U.S. increased by 0.90% in January 2024 compared to the same month of the previous year (0.80% expected).

*Building permits in the U.S. declined to 1.470 million in January from 1.493 million in December 2023.

*Slow productivity growth in Europe may hinder the drop in inflation to the 2% target, said Isabel Schnabel, an ECB official, on Friday.

*The Bank of Japan is on track to end negative interest rates in the coming months despite the economy falling into a technical recession.

*Futures of U.S. stocks log positive figures this morning.

Economic environment

The Federal Economic Competition Commission (COFECE) authorized the acquisition of Iberdrola’s 13 power plants by the National Infrastructure Fund (FONADIN). The operation must be carried out in the next six months and will be financed through development and commercial banking, covering 60% of the acquisition. Additionally, there is mention of the intention for pension funds, pension funds, and other institutional investors to participate. The power plants’ generation will add 8,500 megawatts to CFE and increase its share in power generation to 54%. According to the Ministry of Finance and Public Credit, this transaction does not imply an increase in public budget debt beyond the acquisition cost of 51%.

Markets and companies

U.S. stock futures show positive movements this morning. Investors have spent the week evaluating the direction of the U.S. economy, especially after higher-than-expected consumer price index data this week and a surprisingly sharp drop in January retail sales, which could signal increased weakness in consumer spending. Yesterday, the S&P 500 closed at a new all-time high. The Dow and Nasdaq also recorded gains in the previous session. Meanwhile, U.S. Treasury bond yields rose on Friday after higher-than-expected wholesale prices in January. The yield on the 10-year Treasury bond increased by more than 7 basis points to reach 4.317%, above the observed level of around 4.3%, and the yield on the 2-year Treasury bond was trading at 4.686%, after increasing by about 12 basis points. S&P 500 futures are up +0.47%, while Nasdaq and Dow Jones futures are up +0.83% and +0.16%, respectively. In Europe, stocks are moving higher after two positive sessions that brought them back to recent highs. The Stoxx 600 index was up +0.68% at noon in London, with mining stocks leading with a +2.7% increase. Retail sales in the UK were stronger than expected, providing a necessary glimmer of light for the economy, which, according to Thursday’s data, has entered a technical recession. Sales increased by 3.4% from the previous month, according to the National Statistics Office, surpassing the 1.5% growth forecast in a Reuters survey of economists. It was the largest monthly increase since April 2021 and followed a record drop in December that affected retailers during the crucial holiday month. In Asia, Hong Kong markets led gains on Friday, with Japan’s Nikkei reaching a new 34-year high as it tried to surpass its historical peak. At its intraday high of 38,863, the Nikkei was less than 100 points away from its all-time high. Meanwhile, the economic slowdown in Japan has raised hopes that it can maintain its ultra-flexible monetary policy for longer, even as the country’s finance minister expressed concerns about the weakness of the yen. In Mexico, IPC futures are seen higher (+0.97), standing at 57,807 points. In commodities, oil falls on Friday due to a forecast of slowing demand by the International Energy Agency, countering the support of geopolitical tensions and the hope that the U.S. Federal Reserve could cut interest rates sooner than expected. The IEA announced on Thursday that global oil demand growth could lose momentum and cut its 2024 growth forecast, contrasting with OPEC’s view. In contrast, natural gas prices show upward movements (+1.01%). Metals are mixed: gold -0.3%, silver -0.1%, and copper +1.7%. Finally, cryptocurrencies are in positive territory.

After yesterday’s trading session, the exchange rate ranged from a minimum of 17.03 to a maximum of 17.08, currently trading at 17.08.

Corporate news

*Dropbox shares fell almost 13% after the company issued lower-than-expected first-quarter revenue guidance. Dropbox now forecasts revenue in the range of $627 million to $630 million, while analysts surveyed by FactSet expected $632.5 million.

*Nike is cutting 2% of its current workforce, equivalent to more than 1,500 jobs, as it looks to reinvest in its growth areas and streamline its business.

*Toast shares rose nearly 8% in premarket trading after fourth-quarter results surpassed Wall Street estimates on the top and bottom line. The company also announced plans for a $250 million share repurchase and said it planned to lay off 550 employees.

*Roku shares pulled back 17% after the streaming services company reported a wider-than-expected fourth-quarter loss of 55 cents per share. Analysts polled by LSEG forecast a loss of 52 cents per share. Roku issued an optimistic first-quarter revenue forecast that was above analyst estimates.

*DraftKings shares dropped 1% after the sports betting company missed the top and bottom line for the fourth quarter. DraftKings reported a loss of 10 cents per share, while analysts polled by LSEG estimated a profit of 8 cents per share. Revenue was $1.23 billion, slightly below the $1.24 billion consensus estimate.

*DoorDash stock fell nearly 8% after reporting a larger loss in the fourth quarter than analysts expected. DoorDash reported a loss of 39 cents per share, while analysts polled by LSEG called for a 16-cents loss. The company beat revenue estimates and authorized a share repurchase program worth $1.1 billion.

*Coinbase shares surged 15% after a surprise profit in the fourth quarter. Coinbase earned $1.04 per share on $954 million of revenue for the final three months of 2023. Analysts surveyed by LSEG were expecting a loss of 1 cent per share on $822 million in revenue.