The Day at a Glance | March 11 2024

The Top

*In Mexico, net income from international travelers reached 2.372 billion dollars (mdd) for the first month of 2024.

*China’s annual consumer inflation stood at 0.7% in February 2024, surpassing the market expectation of 0.3% and ending four consecutive months in deflation territory.

*China approves a law that grants the Communist Party more control over the cabinet.

*The ECB is increasingly confident that inflation is decreasing, but it should still postpone an interest rate cut until June, said Slovak Governing Council member Peter Kazimir on Monday.

*Japan’s economy avoided a technical recession, as revised government data showed on Monday.

*U.S. stocks fall on Monday; set to extend losses from last week. 

Economic environment

In Mexico, net income from international travelers reached 2.372 billion dollars for the first month of 2024, a historical high for January since records began in 1990. This represents an increase of 2.5% compared to January 2023. Net income corresponds to foreign exchange earnings of 3.143 billion dollars and expenditures of 771 million dollars, implying growth of 4.7% in earnings and 12.1% in expenditures compared to the first month of the previous year. These earnings are within the tourism account of the balance of payments and are part of the country’s surplus foreign exchange accounts.

China’s annual consumer inflation stood at 0.7% in February 2024, surpassing the market expectation of 0.3% and ending four consecutive months in deflation territory. By components, food logged a deflationary rate of -0.9% year-on-year, lower than the reported -5.9% year-on-year in January, reflecting an increase in pork and vegetable prices, while non-food items grew by 1.1% year-on-year, up from January’s 0.4% year-on-year. Meanwhile, core inflation grew by 1.2% year-on-year in February, the highest rate since January 2022. The rebound in China’s inflation could be due to a seasonal factor related to the Lunar New Year; however, the news is well-received as it appears that the economy is moving away from deflation territory

Markets and companies

Global markets in negative territory. U.S. stocks decline on Monday, poised to extend losses from last week as investors brace for fresh inflation data. The Dow Jones fell -0.9% last week, marking its worst performance since October. The S&P 500 retreated -0.3%, while the Nasdaq dropped -1.2%. The market is gearing up for February’s consumer and producer price indexes, to be released on Tuesday and Thursday, respectively. These data points follow Friday’s February jobs report, which gave mixed signals to investors about when exactly the Fed would start cutting interest rates. In Europe, markets start the week on a negative note. The Stoxx 600 was -0.4% lower at 1:00 pm in London, with tech stocks falling -1.7%. This comes after a strong week for the index, which saw it close above 500 points for the first time. In Asia, Japan’s stocks led losses after the country avoided a technical recession, paving the way for its central bank to raise rates, while investors also assessed China’s inflation data. Oil prices fall on Monday, extending losses from last week; last week, U.S. crude and the global benchmark fell -2.45% and -1.76%, respectively, due to weak demand in China and comments from the International Energy Agency, indicating that the market should be well supplied this year. In Mexico, IPC stocks are slightly down, currently trading at 54,926 points. Lastly, cryptocurrencies are up. Bitcoin reached a new all-time high, above $72,000, after the British financial regulator announced it would allow exchanges to list cryptocurrency-linked products for the first time. Over the weekend, the exchange rate fluctuated between a low of 16.77 and 16.84, currently trading at 16.80

Corporate news

*Crypto-related stocks rose as Bitcoin reached a new all-time high above $72,000. Coinbase and Microstrategy increased by around 6% and 8%, respectively. Marathon Digital also rose by 6%.

*Nvidia’s stock fell by about 1%, extending its loss of more than 5% from Friday’s session. It was its biggest one-day loss since May 2023.

*Netflix shares rose about 1% in pre-market trading after Oppenheimer raised its price target, forecasting nearly a 20% upside in the future. The firm said Netflix’s dominance will “continue, given its clear advantage in producing highly engaging content.”

*Alphabet’s shares fell approximately 6% after the company reported disappointing advertising revenues of $65.52 billion, falling short of the $65.94 billion forecasted by analysts’ consensus.