The Day at a Glance | March 15 2024

*In Mexico, the Timely Indicator of Private Consumption (IOPC) estimates that in January and February, consumption will grow by 4.3% y/y and 4.7% y/y, respectively.

*In the United States, industrial production grew in February when stagnation was expected.

*The Bank of Japan could end its negative interest rate policy as soon as March. Wage reviews at the country’s major companies ended with a nominal annual increase of 5.28%, the highest in 33 years.

*The governor of the central bank of Finland, Olli Rehn, hinted that the European Central Bank has already begun discussions about rate cuts by mid-year.

*Markets could experience volatility due to the expiration of futures and options contracts on indices and individual stocks. 

Economic environment

In Mexico, the Timely Indicator of Private Consumption (IOPC, for its initials in Spanish) estimates that in January and February, consumption increased by 4.3% y/y and 4.7% y/y, respectively. On a monthly basis, these growth rates imply advances of 0.4% in January and 0.1% in February. Private consumption accounts for 70% of GDP.

In the United States, industrial production grew in February when stagnation was expected. In February, the industrial sector increased 0.1% on a monthly basis, compared to market expectations of stagnation and a decline of -0.5% in January. By components, there were increases of 0.8% m/m and 2.2% m/m in manufacturing and mining, respectively. However, electricity generation fell by 7.5% m/m due to warmer-than-normal temperatures. On an annual basis, industrial production was 0.2% below February 2023 levels. Industry capacity utilization remained at 78.3% in February, 1.3 percentage points below its long-term average (1972-2023), suggesting limited inflationary pressures from costs. Some of the growth in manufacturing and mining is attributed to production halts caused by frost in January, so it will be important to wait for the March data to assess the sector’s momentum.

Markets and companies

Mixed global markets. Major U.S. indices closed lower yesterday. This morning, markets started the day in negative territory as they attempted to close a volatile week following a series of new inflationary data: Dow -0.29%, S&P -0.49%, and Nasdaq -0.94%. In Europe, markets show gains, with the Euro Stoxx up +0.38%, with sectors trading in opposite directions. Asian markets are mixed after U.S. producer prices grew faster than expected, up 0.6% in February. Japan’s Nikkei 225 closed down -0.26% at 38,707.64. In Mexico, the IPC opened higher, at $56,111.7 points (+0.09%). Oil logged a decrease in price as both OPEC and the International Energy Agency expect a tight oil market this year. The price stands at $80.64 per barrel (-0.8%). Natural gas is down (-2.10%). Meanwhile, metals are mostly mixed, with gold -0.10%, silver +1.40%, and copper +1.30%. Lastly, Bitcoin traded above $72,000 overnight but suffered a 7% drop and is now near $67,000.

After yesterday’s trading session, the exchange rate fluctuated between a low of 16.66 and a high of 16.73, currently trading at 16.71

Corporate news

*Adobe fell 11% due to weak sales guidance.

*Ulta Beauty shares fell over 6% after its 2024 guidance greatly disappointed analysts.

*Hyundai Motor and Kia Corp were planning to recall 170,000 electric vehicles in South Korea due to software issues in their charging systems, according to South Korea’s Ministry of Land, Infrastructure, and Transport.

*Nvidia dropped over 1%. The decline caused shares to fall 0.7% for the week. This would mark its first weekly decline in 10 weeks.