The Day at a Glance | February 21 2025

The Top

• Mexico´s economy expanded 1.5% in 2024, while the IGAE for December contracted sharply on the margin.

• Eurozone PMI´s indicate that the economy showed some improvement in February.

• Federal Reserve officials are closely monitoring rising inflationary risks and the uncertain impact of President Donald Trump’s trade, immigration, and other policies.

• Traditional parties in Germany lost support, while the far-right AfD gained ground in one of the last polls before Sunday’s elections, pointing to a complex coalition formation process that could take months.

• UK retail sales rose in January for the first time since August, significantly exceeding expectations, according to official data suggesting that consumers remain willing to spend despite weak economic prospects.

• Japan’s core consumer inflation reached 3.2% in January, its fastest pace in 19 months, reinforcing expectations that the central bank will continue raising interest rates from still-low levels.

• Oil prices fell on Friday but remained on track to end the week higher, driven by supply disruptions in Russia, while uncertainty persists over a potential peace deal in Ukraine.

Economic Environment

Mexico´s economy expanded 1.5% in 2024, while the IGAE for December contracted sharply on the margin. In the last quarter of the year, Mexico´s economy shrank by 0.6% q/q, according to preliminary seasonally adjusted figures, making the quarterly estimate identical to the flash reading. The quarterly decline was driven by an 8.5% q/q contraction in the primary sector and a 1.5% q/q drop in the secondary sector, while the tertiary sector posted a slight 0.2% q/q increase. According to final and unadjusted figures, fourth-quarter GDP growth was 0.5% y/y, with the following sector breakdown: -4.0% in the primary sector, -2.0% in the secondary sector, and 2.1% in the tertiary sector. As a result, the economy expanded by 1.5% in 2024, based on final and unadjusted figures. Meanwhile, the IGAE, a proxy for monthly GDP, showed that the economy slowed sharply in the last month of 2024, falling 1.0% m/m in seasonally adjusted terms. Overall, last year’s economic activity data pointed to a significant slowdown, and in our view, we cannot rule out the possibility that this could extend into the first quarter of 2025.

Eurozone PMI´s indicate that the economy showed some improvement in February. The Eurozone´s composite PMI stood at 50.2 in February, maintaining the same growth pace as in January. Breaking it down, the manufacturing PMI reached 47.3 in February, above January’s 46.6 estimate and marking its highest level in nine months, though still in contraction territory. Meanwhile, the services PMI fell to a three-month low, declining from 51.3 in January to 50.7 in February. Overall, preliminary February data showed that business activity in the Eurozone saw very weak growth, as moderate expansion in the services sector barely offset the prolonged contraction in manufacturing. In this regard, economists at Capital Economics suggest that these figures indicate the Eurozone economy may have stagnated in the first quarter of 2025.

Markets and Companies

Futures for major US indices showed mixed figures before market open, while the Trump administration signaled the possibility of easing sanctions on Russia. Meanwhile, European markets were trading higher, driven by corporate reports, with Standard Chartered standing out after exceeding expectations and Kingspan rebounding. In Asia, markets closed in positive territory, led by Hong Kong and boosted by Alibaba’s gains following strong results in its cloud and e-commerce units.

In the commodities market, oil prices were declining. In precious metals, gold also edged lower after reaching two record highs during the week, driven by economic uncertainty and its role as a safe-haven asset amidst trade tensions.

In fixed income, the 10-year bond yield stood at 4.50%, while the 2-year yield was at 4.27%, as investors awaited key economic data, including manufacturing and services PMI indices.

IPC futures were trading higher, while the exchange rate stood at 20.33 pesos per dollar, compared to 20.31 yesterday at market close. 

In 4Q24, Orbia reported revenues of $1.78 billion, remaining stable compared to 4Q23, while EBITDA declined 2% y/y. The results fell short of our expectations and consensus estimates; however, at the EBITDA level, there were non-recurring charges of $51 million. Excluding these, EBITDA would have increased by 20.8% y/y, aligning more closely with expectations. For the full year, Orbiaposted a 9% decline in revenue and a 25% drop in EBITDA, as the company faced challenges across most of its markets and business segments. For 2025, Orbia expects EBITDA generation of approximately $1.25 billion, representing a 14% y/y increase. This would be in line with the efficiency plan presented in the last earnings call.

Kof released solid 4Q24 results this morning. Revenue rose 14.3% y/y, driven mainly by volume growth, revenue management initiatives, and favorable mix effects. In terms of earnings, Adjusted EBITDA increased by 22.5% compared to 4Q23.

Corporate News

• UnitedHealth shares were declining after the Wall Street Journal reported that the insurer is under investigation by the Department of Justice over its handling of diagnoses in Medicare Advantage plans.

• Rivian exceeded expectations in 4Q but projected lower sales in 2025. However, the company expects to reduce its adjusted losses to a range of $1.7–$1.9 billion, down from $2.69 billion in 2024.

• MercadoLibre beat expectations with revenue of $6.06 billion and earnings per share of $12.61. The company’s stock reacted with a significant increase following the report.