The Day at a Glance | February 28 2024

The Top

*In the United States, the economy grew by 3.2% in 4Q23, according to the second of three estimates. 

*In the afternoon, the Bank of Mexico will release its Inflation Report for 4Q23. 

*The U.S. Congress seeks to approve a temporary funding bill before Friday to avoid a partial government shutdown. 

*The European Central Bank needs more data before starting to cut interest rates, said ECB Vice President Luis de Guindos on Wednesday. 

*Russia bans gasoline exports for 6 months starting from March 1.

*Markets are awaiting inflationary figures.

Economic environment

In the United States, the economy grew by 3.2% in 4Q23, according to the second of three estimates, implying a downward revision of 0.1 percentage points from the first estimate due to lower inventory growth. The growth estimate for the entire year 2023 remained at 2.5%. Looking ahead, the GDP Now model from the Atlanta Federal Reserve forecasts that the economy will grow by 3.2% in 1Q24, maintaining momentum.

In the afternoon, the Central Bank of Mexico will release its Inflation Report for 4Q23, updating its macroeconomic scenario for 2024. In last year´s second to last quarter, it estimated economic growth at 3.0% and forecasted inflation to set at 3.4% in 2024, where we expect a slight downward revision to the growth forecast.

Markets and companies

Futures of major U.S. stock indices were trading lower after showing a mixed performance yesterday. The market is anticipating the release of the January personal consumption expenditure figure on Thursday, which is a relevant inflation indicator for the Federal Reserve.  

In Europe, stock markets were experiencing mixed movements. The Stoxx 50 index showed marginal movements. It was noteworthy that Vodafone’s shares were advancing after the announcement that the company was close to selling its business in Italy for $8.7 billion. In Asia, markets displayed a negative bias. In Hong Kong, authorities announced the relaxation of regulations in the residential sector to boost the real estate segment. In Japan, the central bank’s head stated that the probability of reaching the inflation target is not high enough, so they would review monetary policy when there are more signs that inflation is approaching its target.

In the bond market, the 10-year Treasury bond set at 4.27%, showing slight changes while awaiting the inflation figure to be published on Thursday.

Regarding commodities, the price of oil was declining, with WTI trading at $78.7 per barrel, while Brent was at $83.5 per barrel. The market is evaluating the possibilities of a ceasefire in the Middle East, and OPEC could extend production cuts. Gold was at $2,034 per ounce, recording three consecutive sessions of declines.

In Mexico, the IPC’s future was trading higher, standing at 56,589.

The exchange rate is at 17.08 pesos per dollar, slightly up from the previous day’s close of 17.06. Overnight, the exchange rate reached a low of 17.06 and a high of 17.10.

Livepol reported its results for the 4Q23; it was a positive report. Revenues increased by +9.4% (vs +11.0% est.), primarily driven by strong performance in SSS of the Liverpool and Suburbia formats. Double-digit increases were also observed in the Interest and Leasing businesses. In terms of EBITDA, profits increased by +19.8%, and the margin advanced by +570 basis points.

Corporate news

*First Solar’s shares were up about 4% in pre-market trading as the company reported better-than-expected profits.

*eBay announced an increase in its quarterly dividend amount and additional share buybacks of up to $2 billion.

*According to reports, Apple is said to be halting its plans to build electric vehicles.

*Novavax reported revenues and profits below expectations. The company has been affected by a decline in demand for its COVID vaccine.