The Day at a Glance | June 20 2024

The Top

• In Mexico, April´s retail sales rebounded and exceeded market expectations.

• The Timely Indicator of Economic Activity (IOAE for its acronym in Spanish) estimates that Mexico´seconomy expanded 2.0% year-on-year in May. 

• China might impose provisional anti-dumping measures on pork imports from the European Union as part of an investigation that began on June 17th, according to its Ministry of Commerce.

• The number of unemployment insurance claims in the US decreased from 243,000 to 238,000 in the week ending June 15th.

• The Bank of England kept its benchmark rate unchanged at a 16-year high (5.25%) on Thursday, ahead of the July 4th elections.

• Brent crude oil futures are stable on Thursday, just below seven-week highs, as the escalating conflict in the Middle East raised fears of supply disruptions.

• Main US indices are headed for a positive week after the S&P 500 hit a new record on Tuesday, along with the Nasdaq.

Economic Environment

In Mexico, April´s retail sales rebounded and exceeded market expectations. INEGI reported that retail sales grew by 0.5% in April, on a monthly and seasonally adjusted basis. Annually, and according to unadjusted figures, sales increased by 3.2%, far above the market expectation of a 1.5% increase. Within the annual figures, five out of nine categories remained in contraction, with the largest declinesbeing logged in textile products (-7.9%) and stationery items (-4.5%). However, these declines were more than offset by significant increases in sales of motor vehicles (10.4%), groceries, food, beverages, and tobacco (12.9%), and online sales (18.2%). The retail sales report revealed that consumption rebounded at the beginning of the second quarter of 2024, suggesting greater momentum in the economy.

The Timely Indicator of Economic Activity (IOAE) estimates that Mexico´s economy grew by 2.0% year-on-year in MayBy components, industrial production, which includes construction, manufacturing, electricity generation, and mining, possibly stagnated in May, after growing 0.6% year-on-year in April. In the services sector, 3.0% year-on-year growth is estimated, following a 2.8% year-on-yearincrease logged in the previous month. On a monthly basis, Mexico´s economy is expected to have grown by 0.3% in May, with 0.4% increases in both secondary and tertiary activities. With these figures, and those of the IGAE through March, we estimate that the economy could grow by 0.6% quarter-on-quarter in the second quarter of 2024, accelerating from the 0.3% quarter-on-quarter logged in the first quarter of 2024, according to seasonally adjusted figures.

Markets and Companies

Global markets carry positive sentiment. Yesterday, US markets were closed for Juneteenth. Today, they are in positive territory due to a surge in Nvidia. The Dow is up +0.25%, the S&P 500 +0.15%, and the Nasdaq +0.30%. Meanwhile, the 10-year Treasury bond yield stands at 4.28%. In Europe, the Euro Stoxx index is up +0.74%, with all sectors trading in the green. In Asia, Japan’s Nikkei 225 rose by +0.16%, and closed at 38,633.02. China ended slightly lower at 3,005.4 (-0.42%). In Mexico, the IPC is down and stands at 53,079.1 points. Oil prices remain positive and are above $81 per barrel and heading for their second consecutive weekly gain.

Gold is up by +0.8%, trading at $2,346 per ounce. Silver is at $30.31 per ounce (+1.8%), and copper is at $450.9 per pound (+1.3%). Lastly, cryptocurrencies are up.

After yesterday´s trading session, the exchange rate fluctuated between a minimum of 18.37 and a maximum of 18.44, currently trading at 18.37.

Offers for Terrafina. Blackstone announced that it increased its cash offer for Terrafina’s securities to a purchase price of 39.5 pesos per certificate, up from the previous offer of 38.5 pesos. Yesterday, Terrafina’scertificates closed at 38.24 pesos.

Corporate News

• Trump Media & Technology Group fell around 12% after the company announced that the Securities and Exchange Commission declared its registration of additional shares effective on Tuesday. The stock has fallen 36% so far this month.

• Nvidia has posted a year-to-date return of nearly +180%.

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