The Day at a Glance | July 3 2024

The Top

• In Mexico, positive figures were recorded for new car sales in June.

• The ADP private employment survey reported 150,000 new jobs in June.

• Tomorrow, US markets will be closed for the July 4^thholiday.

• Today, the Federal Reserve will release the meeting minutes corresponding to the June 12^th announcement. Additionally, June´s ISM services index will be published (consensus at 52.5 points).

• French Prime Minister Gabriel Attal said he believed that a multiparty attempt to deprive Marine Le Pen’s far-right party of a majority in the second round of parliamentary elections next Sunday could be successful.

• The number of unemployment insurance claims in the US rose from 234,000 to 238,000 in the week ending June 29^th.

• Oil prices remain stable after a significant reduction in US crude inventories.

• Main US indices are logging marginal changes as investors analyzed weak labor market data ahead of Friday’s jobs report.

Economic Environment

In Mexico, positive figures were recorded for new car sales in June. In June, 122,929 new cars were sold, which is an 8.3% annual increase and the highest figure for June since 2017. Thus, from January to June 2024, 708,650 new vehicles were sold, compared to 633,087 for the same period in 2023. Each month, INEGI collects information from the 23 companies affiliated with the Mexican Automotive Industry Association (AMIA for its acronym in Spanish), Giant Motors Latinoamérica, and Autos Orientales Picacho. Preliminary data from the automotive sector suggests that demand for new cars remains strong despite high interest rates. On July 9^th, the breakdown by brand, as well as automotive production and exports, will be released, which will help better explain the sector’s performance.

The ADP private employment survey reported the creation of 150,000 jobs in June. By sector, services generated 136,000 jobs, with around 63,000 coming from the tourism sector, while goods generated 14,000 jobs. Regarding employment linked to the sale of goods, the increase in the construction sector (27,000) stood out, which was offset by declines in mining (-8,000) and manufacturing (-5,000). According to Nela Richardson, Chief Economist at ADP, June’s figures are strong but do not show an increase in all sectors – as if the tourism sector had not rebounded, the month’s figure would have been disappointing. The ADP employment data suggests a moderate report for non-farm payrolls on Friday. The consensus estimates about 195,000 jobs.

Markets and Companies

Main US indices are logging marginal changes as investors analyzed weak labor market data ahead of Friday’s jobs report. On Wednesday, ADP data showed less private payroll growth than expected in June, while weekly jobless claims numbers were higher than economists predicted. In Europe, markets are up as the volatile trend continued ahead of the elections. The Stoxx 600 was up 0.72% at 2:18 p.m. in London, with most sectors in the green, led by mining stocks, which were up 1.7%. In Asia, markets mostly rose as investors assessed business activity data from the region. Japan’s Nikkei rose 1.26% to end the day at 40,580.76, extending its run above the 40,000 mark, while the Topix ended up 0.54% at 2,872.18. Regarding commodities, oil prices are holding firm. Metals are up, and cryptocurrencies are down. In Mexico, the IPC is up +0.26% and stands at 5,513 points.

After yesterday’s trading session, the exchange rate fluctuated between a minimum of 18.14 and a maximum of 18.30, currently trading at 18.14.

Corporate News

• Shares of Paramount Global surged more than 12% on news that Skydance Media has reached a preliminary deal to buy National Amusements, the company’s controlling shareholder.

• Tesla shares increased 10% during Tuesday’s session after posting stronger-than-expected delivery numbers for the second quarter.