The Day at a Glance | February 27 2024

The Top

*In Mexico, the trade balance logged a deficit worth $4.315 billion in January 2024.

*Biden will meet with congressional leaders as a government shutdown approaches.

*Mediators for Israel and Hamas expressed caution on Tuesday about the possibility of a ceasefire in Gaza, after U.S. President Joe Biden said he believed an agreement could be reached within a week.

*Eurozone loans stall as recovery remains elusive: European Central Bank.

*The Kremlin warns of a conflict with NATO if alliance troops fight in Ukraine.

*Markets anticipating key data scheduled for release later in the week.

Economic environment

In Mexico, the trade balance logged a deficit worth $4.315 billion in January 2024, a figure similar to the $4.106 billion deficit recorded a year ago. Regarding exports, a balance of $41.957 billion was recorded, which is -1.5% compared to the first month of 2023. The decline was mainly due to a 6.5% annual contraction in automotive exports. As for imports, the amount reached was $46.272 billion, -1.0% compared to January 2023. By type of import, consumer goods increased 1.5%, intermediate goods declined by -4.0%, and capital goods grew by 21.6%. The trade balance figures revealed a slight deficit for the first month of the year; however, the drop in automotive exports suggests that weakness in external demand is still present.

Markets and companies

Global markets with mixed sentiment. Futures for major U.S. indices are up, while market momentum takes a breather, with investors anticipating key data scheduled for release later in the week. The Nasdaq leads the way with a +0.36% gain, S&P +0.24%, and Dow +0.06%. Meanwhile, the yield on the 10-year Treasury bond is at 4.27%. The Stoxx 600 index is up +0.09%, led by mining stocks, which increased by 1.14%. Media stocks fell by 0.5%. The Nikkei closes at 39,239.50. On the other hand, China is up +1.29%. In Mexico, IPC futures continue to rise, standing at $56,481 points (+0.51%). Oil prices are on the rise due to disruptions in maritime transport, raising concerns about supply. The price is at $77.57 per barrel. Natural gas prices are down -3.56%. Gold prices are driven by a weaker U.S. dollar and bond yields. The ounce is trading at $2,037 per troy ounce. Silver is trading at $22.63 per troy ounce, and copper at $384.90 per pound. Lastly, cryptocurrencies are up. Bitcoin is on an upward streak, surpassing $57,000 overnight, now with a 10% increase in two days, reaching a two-year high.

After yesterday’s trading session, the exchange rate fluctuated between a minimum of 17.04 and a maximum of 17.10, currently trading at 17.06.

Alsea released its quarterly results yesterday afternoon, and it was a positive report. Revenues increased by +7.8%, primarily due to a +12.1% growth in Same-Store Sales (VMT), offset by unfavorable currency effects. Excluding this effect, total sales increased by +13.8%. Starbucks, Fast Food, and Casual Dining were standout segments. In terms of profitability, pre-IFRS16 EBITDA rose by +25.9%, and the margin advanced by 230 basis points. This morning, Alsea announced that Federico Rodríguez Rovira will assume the position of Director of Administration and Finance. Rafael Contreras Grosskelwing, who has held this position in recent years, has been supporting Federico since November in a transition process that will conclude in March. Rafael will continue to be part of the organization, supporting the General Management and the Board of Directors.

Fibra Prologis announced that its Manager, Prologis Property, has agreed to reduce its Asset Management Fee, currently calculated at 75 basis points on the value of assets under management. For assets with a value less than 5 million dollars, the fee will be 75 basis points, and for assets with a higher value, it will be 60 basis points. 

In 4Q23, Funo reported a year-on-year growth of 8.8% in revenues and 4.9% in Net Operating Income (NOI). The results were in line with our revenue expectations and slightly below in NOI. We consider the report to have a neutral implication, so market attention will focus on the company’s plans regarding the internalization of management and the placement of industrial assets in the market.

Livepol will report its 4Q23 results this afternoon. We expect commercial sales to advance in the high single digits, surpassing the ANTAD comparable indicator. Additionally, we expect a good performance in Financial Services and Leasing businesses. Regarding profitability, there will be an improvement in the gross margin due to a more favorable cost environment, although this will be partially offset by an increase in expenses.

In the fourth quarter of 2023, Volaris reported positive results, exceeding revenue and EBITDAR estimates. Revenues grew by 10% year-on-year, reaching $899 million, driven by a higher occupancy factor and increased revenue from additional services, offsetting the decline in passengers due to capacity reduction. Although passenger traffic decreased by 2.7%, revenue from additional services per passenger increased by 32.5%. EBITDAR increased by 35%, reaching $281 million, with an improved margin of 31.3%. Net income was $112 million. The Net Debt/EBITDAR ratio stood at 3.4x.

Corporate news

*Macy’s lost 3% after the company reported quarterly revenues slightly below analysts’ estimates. Additionally, they forecast another year of stagnant sales.

*Zoom Video is up 12% after a better-than-expected fourth-quarter report.