The Day at a Glance | January 7 2024

The Top

• Annual consumer inflation in the Eurozone closed 2024 at 2.4%.
• Yesterday, Justin Trudeau announced he would resign as Canada’s prime minister after nine years in office. Parliament will be prorogued, or suspended, on March 24^th.
• In 2024, 213,993 formal jobs were created in Mexico, logging a 1.0% increase compared to the end of the previous year.
• Michael Barr, the Federal Reserve’s Vice Chair for Supervision, announced he would step down on February 28^th. His unexpected decision avoids a potential legal confrontation with President-elect Donald Trump, who will now appoint an official of his choice to the role.
• China’s central bank increased its gold reserves in December for the second consecutive month, resuming purchases in November after a six-month pause, according to official data from the People’s Bank of China.
• Global crude oil export volumes decreased by 2% in 2024, marking the first decline since the COVID-19 pandemic, according to shipping data. The decrease was attributed to weak demand growth and refinery and pipeline changes that reshaped trade routes.
• Oil prices rose on Tuesday, reversing earlier declines, driven by fears of tighter supply from Russia and Iran due to stricter Western sanctions.

Economic Environment

Annual consumer inflation in the Eurozone closed 2024 at 2.4%, in line with consensus expectations, after reaching 2.2% in November. This marks the fourth consecutive month of increases. By components, inflation for food, alcoholic beverages, and tobacco was 2.7% y/y (previously 2.7%), services rose to 4.0% y/y (previously 3.9%), non-energy industrial goods increased 0.5% y/y (previously 0.6%), and energy inflation reached 0.1% y/y (previously -2.0%). Moreover, annual inflation in the Eurozone’s major economies rose between November and December. In France, it increased from 1.7% to 1.8%; in Spain and Germany, from 2.4% to 2.8%; while in Italy, it slightly declined from 1.5% to 1.4%. Overall, Eurozone inflation accelerated in the last month of the year due to a rebound in the energy component, which was anticipated by markets and early readings from Spain and Germany. In this context, the European Central Bank may adopt a more cautious stance on rate cuts.

Markets and Companies

Futures for main US indices logged slight gains this morning, following a boost in tech stocks led by a rally in semiconductor manufacturers like Nvidia, which introduced new chips featuring artificial intelligence technology. In Europe, markets were mostly higher as investors assessed the latest inflation data in the region, which logged a 2.4% y/y increase in December. Lastly, in Asia, markets closed higher.

In commodities, oil prices are up. Sanctions on Russia and Iran, along with shipping restrictions in China, are boosting prices. Meanwhile, gold rose to $2,660 per ounce, benefiting from a weaker dollar. China continues to accumulate gold reserves, further bolstering its price in markets.

In fixed income, yields on 2-year and 10-year US Treasury bonds stood at 4.27% and 4.63%, respectively.

In Mexico, IPC futures logged gains, reaching 50,368 points. Regarding the exchange rate, the peso is trading at 20.34 per US dollar, compared to yesterday´s 20.32 at market close.

Grupo Aeroportuario del Pacífico reported its December passenger traffic, recording a 3.4% increase in total passenger traffic across its 12 Mexican airports compared to the same month in 2023. Guadalajara and Tijuana led the way with 8.2% and 2.7% increases, respectively, while Puerto Vallarta and Los Cabos reported declines of 1.8% and 0.9%.

Grupo Aeroportuario del Sureste reported 2.3% growth in total passenger traffic in December 2024 compared to the prior year, driven by increases in Puerto Rico (+16.2%) and Colombia (+14.5%). However, traffic in Mexico fell by 5.7%, impacted by declines in international (-5.6%) and domestic (-6.0%) segments.

GCC announced the acquisition of three aggregate operations in Texas for approximately $100 million. The new assets add over 4 million tons annually and 50 years of reserves, strengthening its presence in key markets like Dallas-Fort Worth and San Antonio. This transaction reinforces its infrastructure expansion strategy.

Corporate News

• Nvidia shares rose 2.5% after unveiling new PC gaming chips at CES in Las Vegas, leveraging its Blackwell technology, which promises superior gaming performance.
• Disney added 2% after announcing it will merge its Hulu + Live TV service with FuboTV. Disney will own 70% of the new company, underscoring its intent to lead the live streaming market.