The Day at a Glance | January 22 2024

The Top

*Beijing sets a higher growth target for 2024 despite the economic slowdown. 

*China commits to taking more decisive measures to boost market confidence. 

*Nikki Haley will campaign in New Hampshire this Monday in hopes of halting Donald Trump’s march towards the Republican presidential nomination. 

*Oil rises as geopolitical conflicts outweigh concerns about demand. 

*4Q23 reports this week will be a determining factor for the stock market, providing insightful views on various sectors.

Economic environment

Beijing, China´s capital, has set a growth target of around 5% for 2024, surpassing last year’s target of over 4.5%, despite expectations of slower growth for the national economy. The capital’s economy expanded by 5.2% in 2023, in line with the national economy, which has so far experienced weak post-pandemic growth amidst an increasingly deepening real-estate crisis, growing local government debt, and persistent deflationary risks. China’s economic growth in 2023 slightly exceeded the annual target of around 5%, partly due to the effect of a low comparison base during COVID-19 lockdowns. Chinese leaders have made boosting confidence in the economy one of their top political priorities, as businesses and consumers distrust job security, income growth, and the real estate market. In this regard, Beijing’s growth target for 2024 could serve as a precursor to a more favorable national growth target. The national growth target is expected to be announced at the opening of the annual parliamentary meeting in March.

Markets and companies

Global markets show positive sentiment. The strength of Wall Street seems to depend on whether the Federal Reserve will achieve a soft landing. Additionally, markets are anticipating economic reports to be released this week, including GDP data on Thursday and personal consumption expenditure prices on Friday. The Dow Jones is up by 0.70%, while the S&P 500 is up 0.99%, and the Nasdaq Composite is up by 1.35%. Meanwhile, the yield on the 10-year Treasury bond remains above 4.00%. In Europe, markets posted gains with the EuroStoxx up +0.41%, while preliminary consumer confidence data for January is expected in the Eurozone. In Asia, markets are mixed, with China experiencing a decline of -2.68%, and Japan’s Nikkei 225 reaching a nearly 34-year high to close with an increase of 1.62%, reaching 36,547. In Mexico, IPC futures opened higher, standing at $56,398 points (+1.71%). The price of oil is increasing as the reopening of a key oil field in Libya is being evaluated, although tensions in the Middle East persist. The price is at $73.66 per barrel, an increase of +0.3%. Natural gas prices are down by -6.19%. Meanwhile, metals are on the decline. Gold prices are decreasing as expectations of a Federal Reserve interest rate cut in March fade, while key economic data from the United States and policy meetings of major central banks are expected this week. The price of gold is at $2,041 per ounce, silver is trading at $22.07 per ounce, and copper is at $376.45 per pound. Lastly, cryptocurrencies are down.

The exchange rate fluctuated during Monday´s early hours, reaching a minimum of 17.05 and a maximum of 17.14, currently trading at 17.07.

Corporate news

*Macy’s increased by 2% after the company rejected a $5.8 billion proposal presented by Arkhouse Management over the weekend to privatize the retailer.

*Boeing fell by 1.8% after the U.S. Federal Aviation Administration recommended operators visually inspect the middle exit door plugs of Boeing 737-900ER aircraft, similar to those taken out of service after the Alaska Airlines emergency.

*Archer-Daniels-Midland fell by 12% after the food processor placed Chief Financial Officer Vikram Luthar on administrative leave amid an investigation into certain accounting practices.

*Spirit Airlines and JetBlue Airways announced on Friday that they plan to appeal a federal judge’s ruling blocking their planned merger. Spirit Airlines rose about 1%, while JetBlue Airways fell by 0.8%.

*StoneCo increased by around 3% after Goldman Sachs upgraded the company to “buy,” citing revenue and credit opportunities for the company.