The Day at a Glance | June 18 2024

The Top

• Aggregate demand moderated in Q1 2024 due to external factors, but domestic demand remains vibrant. 

• In the United States, May´s retail sales increased less than expected (0.1% vs. 0.3% estimated). 

• According to a Reuters survey, the ECB will cut interest rates two more times this year, in September and December. 

• Today, President Joe Biden will announce a program that offers a path to citizenship for hundreds of thousands of immigrants who are in the US illegally and are married to US citizens. 

• Bank of Japan Governor Kazuo Ueda stated that the central bank could raise interest rates next month depending on available economic data. 

• Oil prices remain stable amidst ongoing uncertainty regarding demand.

• Tech company stocks continue their positive trend.

Economic Environment

Aggregate demand moderated in Q1 2024 due to external factors, but domestic demand remains vibrant. In Mexico, aggregate demand, equal to aggregate supply, increased by 1.5% quarter-over-quarter in the first quarter of 2024, according to seasonally adjusted and real figures. Regarding aggregate supply, gross domestic product expanded 0.3% quarter-over-quarter, and the import of goods and services increased by 4.1% quarter-over-quarter. On the demand side, private consumption increased by 1.5% quarter-over-quarter, government spending by 0.3% quarter-over-quarter, gross fixed capital formation by 0.8%, and exports stagnated, also according to seasonally adjusted figures. Annually, and according to original figures, in the first quarter of 2024, aggregate demand increased by 2.6% (previously 2.2%), gross fixed capital formation by 9.2% (previously 17.0%), private consumption by 3.5% (previously 4.4%), government consumption by 1.5% (previously 2.8%), and exports decreased by -6.8% (previously -8.0%). Aggregate demand figures confirm that in Q1 2024, economic expansion moderated mainly due to foreign demand factors, as exports stagnated and imports rebounded strongly. Greater momentum is expected for Q2 2024, with possible moderation in the second half of the year.

Markets and Companies

Global markets carry positive sentiment. Major US indices closed the previous day with gains. Today, they are logging mixed figures due to weak retail sales data. The Dow is up +0.26%, the S&P is up +0.17%, and the Nasdaq is down -0.07%. Meanwhile, the 10-year Treasury yield is at 4.25%. In Europe, the Euro Stoxx index is up +0.53%, with all sectors trading in the green. In Asia, Japan’s Nikkei 225 rose +1.0% and closed at 38,482.11 after falling nearly -2% yesterday. China ended slightly higher at 3,030.2 (+0.48%). In Mexico, the IPC opened lower at 52,364.1 points. Oil prices remain positive despite mixed economic data from China. Today, the price stands at $80.64 per barrel. Gold is up +0.1%, at $2,321 per ounce. Silver is trading at $29.42 per ounce (-0.1%), and copper at $440.25 per pound (-0.6%). Lastly, cryptocurrencies are down.

After yesterday´s trading session, the exchange rate fluctuated between a low of 18.29 and a high of 18.62, currently trading at 18.33.

Corporate News

• Broadcom surged more than 3%, while Qualcomm and Micron Technology each went up over 2%. 

• Nvidia has posted a year-to-date return of nearly +165%. 

• Toyota has re-elected Akio Toyoda as chairman of its board of directors. 

• Berkshire Hathaway has acquired more shares of Occidental Petroleum, increasing its massive stake in the Houston-based oil and gas producer to nearly 29%.