The Day at a Glance | January 23 2025

The Top

• In Mexico, inflation in the first half of January set at 3.69%.

• US President Donald Trump threatened Russian President Vladimir Putin with high levels of taxes, tariffs and sanctions if they do not reach a deal to end the war in Ukraine.

• In the week ending January 18^th, 2025, initial unemployment claims in the US stood at 223 thousand (220 thousand expected), increasing fromthe previous week´s 217 thousand. 

• On Thursday, British Finance Minister Rachel Reeves told Reuters that, if necessary, she will announce changes to comply with her fiscal rulesin March, although she stressed the importance of not being “hasty” with two months still to go.

• Japanese exports rose for the third straight month in December, boosted by a weak yen that boosted the value of shipments. However, a drop in volume highlighted doubts about an uncertain outlook due to the unpredictability of US trade policy.

• On Thursday, NATO Secretary General Mark Rutteurged the US to continue supplying weapons to Ukraine to combat the Russian invasion and said he was confident that Europe was willing to bear the cost.

• Oil prices were virtually unchanged on Thursday, retaining almost all of the previous session’s losses, amidst uncertainty over how the US president’s proposed tariffs and energy policies could affect global economic growth and demand for energy. 

Economic Environment

In Mexico, inflation in the first half of January set at3.69%. INEGI announced that the National Consumer Price Index for the first half of January recorded a 0.20% figure, below our 0.33% estimate and the consensus´ 0.27%forecast. In its annual change, general inflation for the first half of January set at 3.69%, below the figure recorded in the second half of December (4.21%). Core inflation, which excludes the most volatile items, such as energy and agriculture, and government fees, increased 0.28%, above the consensus estimate of 0.23%. In its annual change, core inflation stood at 3.72% in the first half of January, above the 3.65% logged in the second half of December. By components, merchandise set at 2.75% y/y and services at 4.82% y/y. Regarding the most volatile items, that is, non-core inflation, INEGI reported a considerable slowdown in annual inflation from the 5.95% logged in December to 3.60% in the first half of January. Overall, the annual inflation rate in Mexico slowed to its lowest level in almost four years, falling below 4%, driven mainly by a slowdown in the non-core component. This would reinforce expectations that the Central Bank of Mexico could continue cutting interest rates; however, core inflation accelerated for the second consecutive fortnight.

Markets and Companies

Futures for the main indices in the United States were trading positive this morning. This occurred after the S&P 500 hit a new all-time high yesterday, driven by optimism in the tech sector. President Donald Trump will give a speech at the World Economic Forum, where he´s expected to address his plans regarding tariffs and other economic measures. In Europe, the markets recorded a mostly positive performance, however, the German clothing company, Puma, failed to meet expectations in its latest quarterly report. Lastly, Asian markets were up today; in China, stimulus is expected to back its stock market.

In the commodities market, oil prices were trading slightly higher, amidst uncertainty about energy policies in the US, and the possible increase in local production. Crude oil inventories increased 958 thousand last week. For their part, prices of precious metals decreased.

Concerning fixed income, the 10-year bond yield rose 1 basis point to 4.62%, while the 2-year yield fell to 4.29%

In Mexico, IPC futures were trading up at 51,604 points, while the exchange rate was at 20.45 pesos per dollar after setting at 20.48 at market close yesterday. 

America Movil reported that its independent auditor, EY, withdrew its opinion on the effectiveness of its internal controls as of December 31^st, 2023, after identifying deficiencies in some subsidiaries, including Telmex. The company assured that these observations do not affect its financial statements and is working with EY to correct the aforementioned aspects, updating its annual report accordingly.

Corporate News

• American Airlines reported $13.66 billion in revenue, beating the expectation of $13.40 billion. However, the airline cut its 1Q25 profit forecast due to higher operating costs and lower capacity.

• Warner Bros. Discovery subsidiary CNN plans to lay off hundreds of employees to cut costs, while NBC News is also considering more modest cuts.

• Videogame development company Electronic Artslowered its annual guidance, mainly due to the performance of its soccer game franchise: EA Sports FC.

• Puma adjusted its margin guidance downwards and plans to carry out a series of measures to reduce costs in light of a more challenging environment. In 4Q24, the company reported an EBIT of €109 million, below the €131 million anticipated by analysts.