The Day at a Glance | March 14 2024

The Top

*In the United States, retail sales rebounded in February less than expected.

*In the United States, annual producer inflation surprised to the upside in February. 

*ECB authorities continued to support an interest rate cut in June, but on Thursday, they offered contrasting views on the timing and pace of new measures, suggesting that there is still no consensus within the Governing Council.

*China’s central bank will leave its 1-year rate unchanged on Friday, according to a Reuters survey.

*International oil prices are rising as forecasts from the International Energy Agency (IEA) suggest a tighter market.

*The U.S. stock market is trading higher. 

Economic environment

In the United States, retail sales rebounded less than expected in February. In February 2024, retail sales increased 0.6%, below the 0.8% expected by analysts and the revised growth of -1.1% from a month ago. Excluding more volatile items such as autos and gasoline, retail sales rose by +0.3% m/m in February 2024. On an annual basis, retail sales grew by 1.2%, while sales excluding autos and gasoline grew by 2.2%. These figures include growth of 6.4% y/y in online sales, +6.3% in restaurants and bars, autos +1.4%, clothing +1.3%, department stores -4.4%, and gas stations -4.5%. The retail sales data has a positive bias, considering that between October 2023 and January 2024 there were declines or stagnation in month-over-month comparisons.

In the United States, annual producer inflation surprised to the upside in February. In February, the producer price index grew by 0.6%, after growing by 0.3% in January, both figures seasonally adjusted. The consensus estimated an increase of 0.3% in the second month of the year. On an annual basis, producer inflation stood at 1.6%. Meanwhile, core producer inflation grew at monthly and annual rates of +0.3% and 2.0%, respectively.

Markets and companies

The U.S. stock market is trading higher as investors digest the latest reading of the Producer Price Index for February, which came in above consensus expectations. Following the recent inflation figures, the market is awaiting the Federal Reserve’s monetary policy meeting next week, where it is expected that the Fed will keep its benchmark interest rate unchanged. The market assigns a higher probability to rate cuts occurring in the second half of the year. On corporate matters, the U.S. House of Representatives approved a measure for the Chinese company ByteDance to divest its position in TikTok. The measure still needs to be approved by the Senate.

In Europe, markets were trading with a positive bias, while mixed movements were observed in Asia.

Treasury bond yields reacted positively following the Producer Price Index release. The yield on the 10-year bond stood at 4.26%.

Regarding commodities, oil prices were trading higher, with Brent crude at $84.8 per barrel (bbl) and WTI at $80.7 bbl. The latest data showing a reduction in crude inventories in the U.S. and attacks by Ukraine on refineries in Russia have boosted prices.

In Mexico, the peso-to-dollar exchange rate was trading higher at $16.73, after closing at $16.67 yesterday.

Yesterday afternoon, Cemex announced in a statement that due to the strength and solidity in its financial and operational performance, the rating agency S&P Global Ratings has upgraded Cemex’s long-term credit rating globally to “BBB-“, thereby granting it investment grade status. Additionally, it has raised the long-term credit rating of the issuer at the national level to “mxAA+”, while confirming its short-term credit rating as a national issuer.

Corporate news

*Shares of Robin Hood rose after the trading company announced that trading volume on its platform increased by 41% year-on-year in February.

*Dollar General reported quarterly results better than expected both in terms of revenue and earnings.

*MicroStrategy will issue $500 million in convertible senior notes, which would be used to acquire bitcoins and for other corporate purposes.