The Day at a Glance | March 12 2024

The Top

*In the United States annual consumer inflation stood at 3.2% in February 2024.

*In Mexico, industrial production grew by 2.9% YoY in the first month of the year.

*Joe Biden and Donald Trump are set to secure enough delegates this Tuesday to clinch their nominations, formally initiating the first rematch of the U.S. presidential elections in almost 70 years.

*Chinese Prime Minister Li Qiang will not attend a crucial business summit, raising concerns about Beijing’s commitment to attract foreign investments.

*China’s emission and efficiency targets are at risk after falling short in 2023.

*Bank of Japan Chief Kazuo Ueda slightly dampens optimism about the economy.

*The market experienced an uptick following the release of February´s inflation report. 

Economic environment

The annual inflation rate in the U.S. was 3.2% in February 2024. This reading beat the consensus estimate of 3.1% YoY and also the previous data. The monthly and seasonally adjusted reading remained in line with the market forecast of 0.4%, matching the previous figure of 0.3%. The increase in the second month of the year was primarily driven by energy and housing prices, which increased 2.3% and 0.4% month-on-month, respectively. On the other hand, core inflation showed variations of 0.4% month-on-month and 3.8% YoY, compared to 3.9% YoY in January. However, the annual reading for services, specifically housing and transportation, remains significantly high at 5.7% YoY and 9.9% YoY, respectively. Overall, the February annual inflation reading does not change the Fed’s narrative, and the outlook remains that there will be no rate cut in this month’s meeting.

In Mexico, industrial production was up by 2.9% YoY in the first month of the year. This exceeded the zero annual growth observed in December and the 2.2% YoY anticipated by market analysts, according to original figures. Internally, two of the four components registered monthly declines, with the most significant being in the electric power generation and distribution industry and mining at -0.8% and -0.4%, respectively, while construction rebounded by 2.2%, and manufacturing grew by 0.2%, according to seasonally adjusted figures. Every month, industrial production in Mexico grew by 0.4%. The rebound in industrial production is good news for first-quarter growth, especially considering that leading indicators suggest improvement in February as well.

Markets and companies

Global markets show mixed sentiment.  U.S. indices reacted to the  U.S. inflation data released this morning, with technology stocks in positive territory. The Dow Jones -0.09%, Nasdaq -0.05%, and S&P +0.34%. Meanwhile, the 10-year Treasury bond yield is at 4.67%. In Europe, markets posted gains, closely monitoring the latest U.S. inflation report. The Stoxx 600 is up by +0.34%. Sectors were mostly in the green, with financial services and travel stocks both rising by more than 1%. China closed down -0.6%, and Japan’s Nikkei 225 fell for a second consecutive day by -0.06%, closing at 38,797.51. In Mexico, the IPC opened higher standing at $55,159.9 points. WTI had experienced an increase to $80 per barrel earlier in the month but has retreated due to concerns about demand in China and production in America. The price is now at $77.62 per barrel.  Meanwhile, metals are mixed. Gold moved away from its all-time highs currently trading at $2,160 per ounce. Silver is trading at $24.12 per ounce, and copper is at $390.80 per pound. Finally, cryptocurrencies are down.

After yesterday’s trading session, the exchange rate fluctuated between a minimum of 16.77 and a maximum of 16.82, currently trading at 16.84.

The National Association of Supermarkets and Department Stores (ANTAD) reported sales results for February. During this month, nominal sales at comparable stores, including those with more than one year of operation, saw an increase of +9.2%. As for total stores, including existing stores and those opened in the last 12 months, grew  +12.3% compared to the same period of the previous year.

Corporate news

*Technology stocks were up after the release of the Consumer Price Index data.

*Nvidia rose by 2.5% in pre-market trading.

*Apple and Microsoft gained approximately 1%, as well as Tesla.

*Oracle surged more than 11% after surpassing Wall Street earnings estimates.