The Day at a Glance | June 28 2024

The Top

• Donald Trump won the first presidential debate in the US.

• In the United States, PCE inflation slightly decreased in May, in line with consensus estimates.

• On Friday, Thomas Barkin, President of the Richmond Federal Reserve Bank, said that while he believes that the Fed´s current monetary policy is sufficient to reduce inflation to its target level, it may not be as strict as widely thought.

• The far-right in France widened its lead in a poll published on the last day of campaigning before the first round of parliamentary elections on Sunday.

• Oil prices rose following US inflation data and are heading for their third consecutive week of gains.

Economic Environment

Donald Trump won the first presidential debate in the US. Yesterday, the first debate for the US presidential race took place between Democratic candidate Joe Biden, the current president, and Republican candidate Donald Trump, the former president. Various columnists and media outlets agreed that former President Trump performed better than the Democrat. However, the debate lacked discussions on certain topics, particularly those related to the bilateral relationship with Mexico, international trade protectionism, and the immigration agenda. The next debate is scheduled to take place on September 9^th. 

In the United States, PCE inflation slightly decreased in May, in line with consensus estimates. In the US, personal disposable income and personal consumption expenditure increased by 0.5% (previously 0.3%) and 0.2% (previously 0.1%), respectively. Annual personal consumption expenditure (PCE) inflation, a key indicator for the Federal Reserve’s inflation target, slightly decreased from 2.7% in April to 2.6% in May 2024, matching market expectations. Within the index, service prices increased by 3.9%, energy prices by 4.8%, food prices by 1.2%, and goods prices decreased by -0.1%. The core index stood at 2.6% in May after setting at 2.7% for two consecutive months. On a monthly basis, PCE inflation logged no change, while its core component recorded a slight increase of 0.1%. For June, the Cleveland Fed’s Nowcasting model estimates CPI inflation at 3.1% and PCE inflation at 2.5%.

Markets and Companies

Main US stock indices are trading higher and reacted positively to US personal consumption expenditure (PCE) inflation data for May, which stood at 2.6% year-over-year, marking the smallest increase in nearly three years. The USstock market is set to end the first half of the year on a positive note, driven by gains in the technology sector amidst optimism regarding developments in artificial intelligence. The Nasdaq index leads gains for the semester with a 19% return, followed by the S&P 500, which has risen about 15%, while the DJI has yielded a return of 4%.

In Asia, stock markets closed positively, notably in Japan, where the Topix index reached its highest level in 34 years after industrial production growth data exceeded expectations.

In the debt market, the 10-year Treasury bond yield stands at 4.26%, as the market assimilates May´s consumer inflation figure.

Meanwhile, oil prices continue to rise, reaching two-month highs.

In Mexico, the IPC is trading higher, standing at 52,478.4 points.

The exchange rate of the peso against the dollar is 18.325.

Corporate News

• Nike shares fell after reporting quarterly results below expectations. Additionally, the company revised its guidance downward, anticipating a 10% drop in revenue for this quarter.

• Trump Media & Technology shares logged a rebound due to yesterday’s presidential debate, where it is considered that D. Trump performed better than J. Biden.