The Day at a Glance | January 17 2024

The Top

*In 2023, China´s economy grew by 5.2%, surpassing the 5.0% target. For 2024, the consensus estimates 4.5% growth.

*Retail sales in the U.S. pleasantly surprised with a month-on-month growth of 0.6%, exceeding the consensus estimate of 0.4%.

*Joe Biden administration unveiled its proposal to limit overdraft fees charged by banks.

*Inflation in the United Kingdom unexpectedly rose, reducing expectations for interest rate cuts.

*Business owners fear that tensions in the Red Sea may lead to lasting bottlenecks.

*This week, the momentum in fourth-quarter earnings could pose a significant challenge for the market, with the potential to influence its structure in 2024. 

*According to Aswath Damodaran, the market appears overvalued by approximately 9% to 10%.

Economic environment

In 2023, the Chinese economy grew by 5.2%, surpassing the 5.0% target. For 2024, the consensus estimates a growth of 4.5%. In the fourth quarter of last year, the Asian giant recorded an annual growth of 5.2%, higher than the 4.9% in the third quarter but below the market forecast of 5.3%. December´s activity data showed that industrial production increased by 6.8%, its fastest pace in nearly two years. On the other hand, retail sales grew by 7.4% in December 2023, significantly below the 10.1% recorded in November and below the market expectation of 8.0%. Annual GDP growth for 2023 is the slowest since 1990, excluding the 2020-2022 period, highlighting the impact of the prolonged real estate crisis and weak consumption. For 2024, Beijing will announce its GDP growth target at the annual parliamentary meeting in early March. With the release of the figures, analysts’ consensus anticipates the possibility of seeing stimulus measures from the People’s Bank of China in the coming months.

Markets and companies

Global markets with mixed sentiment. Wall Street is recovering from a losing session as the yield on the 10-year Treasury bonds surpassed 4% again, following a warning from Federal Reserve Governor Christopher Waller that the pace of monetary policy easing could be slower than expected. U.S. index futures are in positive territory, with the Dow Jones up 0.12% during the first trading session of the shortened week, the S&P 500 recording a 0.23% increase, and the Nasdaq Composite rising by 0.26%. Meanwhile, the yield on the 10-year Treasury bond increased to 4.064%. In Europe, markets are experiencing losses, with EuroStoxx down by 1.08%, and regional attention is focused on the World Economic Forum taking place this week in Davos, Switzerland. In Asia, markets are down, with China experiencing a decline of -2.09%, and Japan’s Nikkei 225 extending losses for the second consecutive day after reaching 33-year highs on Monday, with the index falling by 0.4% to 35,477.75. In Mexico, IPC futures opened higher, reaching 56,075 points (+1.72%). Oil prices dropped, experiencing a decline due to the slower-than-expected economic growth in China, the second-largest global crude oil user, raising concerns about future demand. The price set at $70.68 per barrel, a -2.4% decrease. Natural gas prices are down by -0.55%. Gold prices have decreased, nearing a one-week low, attributed to the strength of the dollar influenced by potential restrictive measures from the Federal Reserve. The price of gold is at $2,022 per ounce. Silver is trading at $22.77 per ounce, and copper is at $374.95 per pound. Lastly, cryptocurrencies are retracting.

Corporate news

*Alibaba Health Information Technology fell by 7.43%, making it the biggest loser on the Hang Seng Index (HSI).

*Interactive Brokers dropped nearly 3% after reporting mixed quarterly results.

*Spirit Airlines and JetBlue Airways declined following a federal judge’s blockage of JetBlue Airways’ $3.8 billion acquisition proposal for Spirit Airlines. JetBlue’s shares fell almost 1%, while Spirit Airlines saw a decrease of over 20%.

*Interactive Brokers fell 3% after the electronic broker released fourth-quarter results.

*Sinclair, the broadcasting group, gained 5.2% after announcing the resolution of all legal disputes related to Diamond Sports Group.

*Nutanix rose 4% after William Blair initiated coverage of the cloud company with an “outperform” rating.

*Rivian, an electric vehicle manufacturer, dropped 3.6% after Deutsche Bank downgraded Rivian from “buy” to “hold.”

*Tesla fell 1.8% after reducing the prices of its cars in several European countries, following the recent price cuts by the electric vehicle giant in China.