The Day at a Glance | January 30 2024

The Top

*The Mexican economy has been experiencing nine consecutive quarters of expansion. 

*The GDP of the Eurozone stagnated during 4Q23. 

*The IMF says a global “soft landing” is looming and raises economic growth prospects for 2024.

*The Pentagon says it is not seeking a war with Iran after the attack in Jordan.

*Hamas is studying a ceasefire proposal following an Israeli attack.

*It is the most active reporting week of the season, with 19% of the companies in the S&P 500 scheduled to report their results. 

*Markets are waiting for results of major tech companies.

Economic environment

Mexico´s economy continued its nine consecutive quarters of expansion, showing a slight rate of growth (0.1% Q/Q) in 4Q23. This growth compares negatively against the 0.4% Q/Q projected by the analysts´ consensus, significantly decelerating from what was logged in the 3Q23 (1.1% previous). There was a decline in primary activities of -1.1% Q/Q. On the other hand, tertiary activities increased 0.1% Q/Q during the fourth quarter of the year, while secondary activities showed no change. Thus, on an annual basis, GDP growth set at 2.4%, indicating that the Mexican economy continues to expand at a good pace despite a slowdown from the previous quarter (3.3% previous). In a disaggregated manner, industry figures showed positive changes; 0.1% in the primary sector, 3.1% in secondary activities, and 2.2% in the tertiary sector. Considering the above, GDP has experienced an expansion of 3.1% during 2023, demonstrating the strength and resilience of the Mexican economy amidst challenging international circumstances, as well as the aggressive restrictive on behalf of the central bank. 

The Eurozone´s GDP showed no quarterly growth during the 3Q23. This reading compares positively against the -0.1% decline logged in the previous quarter and the consensus estimate, which forecasted the same change. On an annual basis, the Eurozone´s economy recorded an increase of 0.1%, accelerating from stagnation observed in the 3Q23 and remaining in growing territory. By countries, France and Italy logged growth rates of 0.7% YoY and 0.5% YoY, respectively. On the other hand, Germany recorded a contraction of -0.2%.

Markets and companies

Global markets with mixed sentiment. Futures for major U.S. indices are down as the latest corporate reports are analyzed, along with the Federal Reserve meeting. The S&P 500 and the Dow Jones Industrial Average reached new highs again on Monday, marking their sixth record closes of the year. The S&P rose by 0.76% to reach 4,927.93, surpassing its previous closing record of 4,894.16 set last week. On the other hand, the Dow closed the day at 38,333.45, while the Nasdaq Composite increased by 1.12%. The Nasdaq leads this morning with a 0.41% increase. The Dow is up +0.16%. The S&P 500 rose +0.32%. Meanwhile, the yield on the 10-year Treasury bond dropped by over 2 basis points, standing at 4.066%. In Europe, markets are on the rise with EuroStoxx +0.36% as preliminary fourth-quarter GDP figures for the Eurozone are taken in. In Asia, Hong Kong markets led losses in the region, dealing with the repercussions of Evergrande’s liquidation order. China is down -1.83%, and Japan’s Nikkei 225 is up 0.11% at 36,065.9. In Mexico, IPC futures continue to rise, reaching 57,930 points (+1.32%). Oil prices are on the rise as growing geopolitical tensions in the Middle East continue to fuel supply concerns. The price is at $76.13 per barrel. Natural gas prices are up by 1.61%. Gold gained ground, with an ounce trading at $2,035.66, silver at $23.05 per ounce, and copper at $387.25 per pound. Finally, cryptocurrencies are mixed. Bitcoin is trading at $43,208.

After yesterday´s trading session, the exchange rate fluctuated between a minimum of 17.17 and a maximum of 17.23, currently trading at 17.21.

Yesterday afternoon, Regional reported its quarterly results with growth exceeding our estimates. The financial margin decreased by -3.3% due to higher financial expenses that undermined the positive revenue growth and effective risk management. Regarding net profit, it reached $1,622 million pesos, representing an 18% year-over-year increase. We highlight the good portfolio expansion, profitability metrics surpassing expectations, and extraordinary growth in non-financial revenues.

Corporate news

*Spotify stock was up 2% after receiving an upgrade from UBS, changing from neutral to buy.

*Pfizer is up by 1% after reporting mixed results in the fourth quarter. Pfizer reported adjusted earnings of 10 cents per share, while analysts surveyed expected a loss of 22 cents per share.

*General Motors increased by almost 8% after surpassing estimates in revenue and profits for the fourth quarter.

*JetBlue Airways stock decreased by 1.3% after reporting a loss of 19 cents per share in the fourth quarter, with $2.33 billion in revenue, surpassing the expected loss of 28 cents per share and $2.29 billion in revenue anticipated by analysts.

*Whirlpool falls by 4% after the company issued weak guidance for 2024. It projected revenues of $16.9 billion for the year, compared to estimates of $17.7 billion.