The Day at a Glance | July 1 2024

The Top

• China’s PMI´s logged mixed results in June.

• Later today, the ISM manufacturing index for the US will be released, with consensus estimates forecasting a 49.5 point figure. 

• Yesterday, Marine Le Pen’s far-right National Rally obtained 33% of the votes in the French parliament, followed by the left-wing block with 28%, and President Emmanuel Macron’s front with 22%, according to the first round.

• Inflation in Germany fell more than expected in June to 2.5%, resuming its downward trend after two consecutive months of increases.

• An unexpected revision of Japan’s Q1 2024 GDP (from -1.8% to -2.9% annualized q/q) complicates the possibility of a reference rate hike on behalf of theCentral Bank this month.

• Hurricane Beryl crossed the Atlantic Ocean and moved towards the Caribbean on Monday as an “extremely dangerous” storm.

• Main indices in the US are mostly up at the start of the second half of the year.

Economic Environment

China’s PMIs logged mixed results in June. China’s composite PMI recorded a slight increase, reaching 50.5 points in June, down from May’s 51.0 points. The non-manufacturing PMI stood at 50.5 points (51.1 prev.), marking eighteen consecutive readings above the 50-point threshold, but moderating its pace of expansion. Meanwhile, the manufacturing PMI remained at 49.5 points, in line with market estimates, but set below the 50 point threshold. Thus, the manufacturing indicator has been in contraction for two consecutive months despite Beijing’s continuous efforts to bolster the sector’s recovery. Overall, the figures logged at the end of the second quarter suggest that the world’s second-largest economy is still struggling to recover amidstweak domestic demand and prolonged weakness in the real estate sector, compounded by a more protectionist trade environment.

Markets and Companies

Main indices in the US are mostly up at the start of the second half of the year. Wall Street recorded a strong finish in the first half of the year. The continued optimism around artificial intelligence and stocks like Nvidia led the S&P 500 to increase +14.5% in the first half of the year, while the Nasdaq rose +18.1%; the Dow Jones increased more moderately (+3.8%). In Europe, markets are trending upward, while investors digest the results of the first round of France’s snap parliamentary elections. The Stoxx 600 was up +0.56% at 2:06 p.m. London time, rebounding from four consecutive losses. This was driven by a rise in France’s CAC index (+1.78%). In Asia, Japan’s Topix reached a new 34-year high; markets in the region began the second half of the year positively as investors assessed June business activity data from China and Japan’s business confidence readings. Regarding commodities, US crude oil prices rose above $82 per barrel ahead of the Fourth of July holiday, after booking a +6% gain last month due to fears of a wider Middle East war and expectations of rising summer fuel demand. Metals are mostly down, and cryptocurrencies are up. In Mexico, the IPyC is up +0.19% and stands at 52,537 points. 

During the weekend, the exchange rate fluctuated between a low of 18.25 and a high of 18.40, currently trading at 18.33.

Corporate News

• Shares of Chewy soared more than +16% after a regulatory filing showed that meme stock trader “Roaring Kitty” bought 9 million shares, amounting to a 6.6% stake in the pet food e-commerce retailer. His other favorite stock, GameStop, fell nearly -7%.

• On Monday, Boeing announced that it would buy back fuselage maker Spirit AeroSystems in a $4.7 billion all-stock deal. Boeing shares fell -0.3% while Spirit AeroSystems shares rose +4.5%.