The Day at a Glance | July 10 2024

The Top

• Consumer inflation in China fell below market expectations, while producer prices remained in deflation.

• The President of the US and NATO leaders are set to unveil a new aid plan for Ukraine at a summit in Washington this Wednesday.

• US President Joe Biden returns to the campaign trail, rallying a key group of union leaders, while some fellow Democrats continue to urge him not to run.

• According to Reuters, the Bank of Japan is likely to cut its economic growth forecast for this year in July, but projected inflation will remain around its 2% target in the coming years, keeping the possibility of an interest rate hike this month alive.

• Oil prices stabilized on Wednesday as OPEC kept its forecast for oil demand growth for this year and next unchanged.

• The S&P 500 is logging marginal changes after reaching another all-time high yesterday.

Economic Environment

Consumer inflation in China fell below market expectations, while producer prices remained in deflation. China’s annual consumer inflation decreased by 0.2% year-on-year in June 2024, below the market expectation of a 0.3% year-on-year figure. This marks the fifth consecutive month of annual growth in inflation. By components, food logged a -2.1% year-on-year rate of deflation (prev. -2.0%); it also marked twelve consecutive months of negative readings, while non-food items remained at 0.8% year-on-year. Concerning non-food items, clothing increased by 1.5% (prev. 1.6%), housing by 0.2% (prev. 0.2%), health by 1.5% (prev. 1.5%), and education by 1.7% (prev. 1.7%). Communication and transportation costs fell by -0.3% after falling by -0.2% in May. Core inflation stood at 0.6% year-on-year in June. On a monthly basis, consumer inflation in June fell by -0.2% (-0.1% prev.). As for producer inflation, June´s reading decreased by -0.8% from the -1.4% logged the previous month. This marked the twenty-first consecutive month of contraction, reflecting fluctuations in global commodity prices and insufficient domestic demand for some industrial goods. Overall, June’s inflation figures suggest that domestic demand is stuck in a slow recovery despite support measures for the world’s second-largest economy.

Markets and Companies

The S&P 500 is logging marginal changes after reaching another all-time high yesterday. Wall Street recorded new all-time highs for the Nasdaq and the S&P 500 as Federal Reserve Chairman Jerome Powell warned that keeping rates high for too long could stunt economic growth. In Europe, markets are up as tensions in France ease and attention shifts to US data; France’s CAC cautiously rebounded as negotiations continue over the formation of a government, and the Stoxx 600 was up +0.5% at 1:53 p.m. London time, with almost all sectors in the green. The travel sector led gains, up +1.6%, while chemical stocks fell -0.36%. In Asia, notable highlights include Japanese stocks reaching new peaks; investors assessed wholesale inflation figures from Japan and inflation data from China. Regarding commodities, oil prices rose on Wednesday amidstexpectations that US crude oil and gasoline inventories fell last week. Metals and cryptocurrencies are up, and in Mexico, the IPC is up +0.11% and stands at 53,390 points.

After yesterday’s trading session, the exchange rate fluctuated between a low of 17.77 and a high of 17.96, currently trading at 17.82.

Corporate News

• The car e-commerce platform, Carvana, jumped 4.5% following an upgrade from Needham, which increasedfrom Hold to Buy.

• LegalZoom.com dropped more than 25% after the company cut its full-year revenue outlook and announced the departure of its CEO. The company expects revenue in the range of $675 – $685 million. The company had issued guidance of $700 – $720 million.