The Day at a Glance | February 26 2024

The Top

*In Mexico, the unemployment rate stood at 2.7% in the last quarter of 2023. 

*US Congress is struggling to avoid a partial government shutdown in just five days, while pushing for a trial against President Joe Biden’s top border official. 

*Trump is working to unite Republicans ahead of the showdown with Biden. 

*The Palestinian Prime Minister resigns as pressure mounts on post-war plans in Gaza. 

*The WTO meeting seeks modest results as global trade faces a challenging juncture.

*Futures of U.S. indices show slight movements today after reaching all-time highs last week.

Economic environment

In Mexico, the unemployment rate set at 2.7% in the last quarter of 2023. According to data from INEGI, in the fourth quarter of last year, the economically active population (EAP), meaning those who worked plus those who engaged in activities to seek employment, reached 61 million people. This is 898,000 more than in the fourth quarter of 2022, equivalent to 60.5% of the Mexican population over 15 years old. The employed population reached 59.4 million, an increase of 1.1 million from the previous year, mainly in trade, transportation, communications, services, and construction. Regarding the underemployed population, those with a job but seeking a second one, it reached 4.6 million people, representing 7.8% of the working population. Lastly, the population not working but actively seeking employment stood at 1.6 million people, a historically low rate of 2.7% concerning the economically active population. Employment data continues to reflect a tight labor market, suggesting that consumer spending could remain strong in the coming months.

Markets and companies

Global markets are mixed. U.S. stock futures show slight movements on Monday morning after major indices reached historic highs last week; investors are awaiting inflationary data this week. Amazon joins the Dow Jones today, replacing Walgreens Boots Alliance. The addition of the e-commerce giant will increase the index’s exposure to technology and consumer retail. European markets record downward movements, with the Stoxx 600 index declining by -0.3% after closing at a historic high last week. Sectors operated mixed, with mining stocks dropping by 2% and financial services rising by 0.2%. In Asia, Japan’s Nikkei 225 index hit a new historic high on Monday as traders returned from a long weekend, while Chinese markets ended a nine-day winning streak. The Nikkei closed 0.4% higher at 39,233.71, comfortably above its previous closing record of 39,098.68. The index surpassed its 1989 historic high of 38,915.87 on Thursday. In Mexico, IPyC futures are up (+0.62%), reaching 57,011 points. Oil prices are down, extending losses due to market perception that higher-than-expected inflation could delay cuts in high-interest rates that have been limiting global fuel demand growth; Brent and WTI futures fall by -0.2% and -0.3%, respectively. Meanwhile, metals are down: gold -0.2%, silver -1.2%, and copper -1.0%. Lastly, cryptocurrencies decline: Bitcoin -0.79%, Ethereum -0.91%.

Over the weekend, the exchange rate fluctuated between a low of 17.09 and a high of 17.13, currently trading at 17.10.

Alsea will report its quarterly results this afternoon. Good performance is expected in Mexican operations (VMT will advance in double digits), while revenues in Europe will slightly decline when consolidated in Mexican pesos. In South America, a neutral performance is expected.

Corporate news

*Domino’s Pizza shares rose over 6% after the restaurant chain announced a 25% increase in dividends and an additional $1 billion share buyback program.

*Berkshire Hathaway’s Class B shares rose nearly 3% due to an almost 30% year-on-year increase in fourth-quarter operating earnings. Berkshire’s cash reserves also reached record levels.

*Gap shares increased by almost 2% after receiving a neutral rating from JPMorgan, praising the company’s product range expansion and cost-saving efforts.

*Moderna shares fell 1.6% after being downgraded from hold to reduce by HSBC. The investment firm noted in a client note that Moderna’s RSV vaccine may not be as effective as its competitors.