The Day at a Glance | March 19 2024

The Top

*In China, there were positive data for the cumulative period of January and February.

*In Mexico, aggregate demand grew by 4.0% in 2023.

*The Bank of Japan increased its interest rate to a range between zero and 0.1% and also ended its control of the interest rate curve.

*President Joe Biden traveled to Nevada and Arizona to promote his proposals for affordable housing and make his case for re-election in two undecided political states that could be critical to his attempt to stay in the White House.

*The European Union is preparing to impose tariffs on cereal imports from Russia and Belarus.

*The UN issued a red alert for record heat temperatures in 2023.

*The S&P 500 reacted negatively after the announcements from Nvidia’s artificial intelligence conference. 

Economic environment

In China, there was positive data for the cumulative period of January and February. Activity data for the first two months of the year showed that industrial production increased by 7.0%, well above the market estimate of 5.2%. On the other hand, retail sales grew by 5.5%, in line with market expectations. Meanwhile, fixed investment, excluding rural assets, increased by 4.2%, above the market’s 3.2% expected for the first two months of 2024. Within investment, residential construction fell by -9.0%, below the consensus at -8.0%, showing that this sector continues to be depressed. The figures are positive, considering that several sectors exceeded market expectations.

In Mexico, aggregate demand grew by 4.0% in 2023. Aggregate demand, equal to aggregate supply, showed that in 2023, the most dynamic sector was gross fixed capital formation with growth of 19.5%, followed by private consumption at 4.3% and government consumption at 2.1%, while exports of goods and services participated negatively with a fall of -6.9%. Aggregate demand figures confirm that last year, domestic demand sectors, consumption and investment, played a fundamental role in the 3.2% growth of the gross domestic product in 2023, while external demand remained depressed.

Markets and companies

Mixed global markets. The major U.S. indices closed the previous day with gains. This morning, markets started the day in negative territory: Dow +0.10%, and Nasdaq -0.88%. The S&P 500 fell -0.25% as the latest announcements from Nvidia’s artificial intelligence conference were taken in. In Europe, markets are showing gains as they look forward to the start of the two-day policy meeting of the U.S. Federal Reserve, with the Euro Stoxx up +0.23%. In Asia, markets recorded mixed results: in Japan, the Nikkei 225 index closed above 40,000 after the country’s central bank raised interest rates for the first time since 2007, and China -0.72%. In Mexico, the IPC opened lower, standing at 56,998.8 points (-0.41%). Oil registered an increase in its price driven by lower crude exports from Saudi Arabia and Iraq, and signs of stronger demand and economic growth in China and the United States, standing at $83.10 per barrel (+0.20%). Natural gas was up (+1.40%). Meanwhile, metals mostly declined, with gold -0.40%, silver -0.70%, and copper -1.20%. Finally, cryptocurrencies retreated. Bitcoin extended its fall, dropping more than $10,000 from its all-time high last week.

The exchange rate fluctuated during the early hours, reaching a minimum of 16.82 and a maximum of 16.94, currently trading at 16.89.

Corporate news

*Nvidia fell 2.6% as news from its first GTC Conference is being evaluated. CEO Jensen Huang presented Nvidia’s latest AI chip, called Blackwell, which he praised as a significantly more powerful successor to its chips that power a multitude of AI operations.

*Super Micro Computer, a leading provider for building Nvidia’s AI servers, fell 10% after news of a stock offering emerged. Shares have risen more than 250% this year thanks to enthusiasm for AI, leading to the shares being added to the S&P 500 on Monday.

*Shares of Japanese banks experienced volatile trading after the Bank of Japan ended its negative interest rate policy and raised rates for the first time in 17 years. Additionally, Mitsubishi UFJ plummeted up to 3.03% immediately after the decision, leading losses among financial stocks.