The Day at a Glance | March 4 2024

The Top

*In Mexico, private consumption and gross fixed investment increased 19.7% and 4.4% in 2023, respectively.

*China cancelled the Prime Minister´s annual press conference for the first time since 1993.

*The Chinese parliament will announce more stimuli this week to stabilize growth.

*Central banks are on the verge of victory in the fight against inflation: BIS.

*Oil starts the week with marginal variations after the extension of OPEC+ production cuts.

*The Nasdaq reached an all-time high on Friday to close the week, driven by enthusiasm towards artificial intelligence. 

Economic environment

In Mexico, private consumption and gross fixed investment grew by 19.7% and 4.4% in 2023, respectively. Fixed investment increased significantly in construction (20.8%) and machinery and equipment (18.5%), on an annual basis and according to figures without seasonal adjustment. By components, the most dynamic were non-residential construction (39.2% YoY), imported and national machinery and equipment (21.6% and 14.1% YoY, respectively), while residential construction showed a moderate increase of 1.8% annually. On the other hand, private consumption in Mexico remained strong with an annual 4.4% increase. Within it, spending on imported goods increased 20.4% and on domestic goods and services by 1.7%, highlighting the momentum among durable goods by 13.8%, according to original figures. Gross fixed investment and private consumption account for 25% and 70% of the gross domestic product, respectively.

Markets and companies

Futures for major U.S. stock indices are operating with a negative trend after experiencing a surge in recent weeks that led them to reach new record levels. Last week, the market reacted to the consumer inflation figure and the quarterly earnings season, which, overall, had a positive outcome. The consensus expects S&P 500 companies’ profits to increase by 9.8% in 4Q23. For the entirety of 2023, profits would have grown by 4.0%, while the expectation for 2024 is a growth of 9.7%. It is worth noting that much of the rise in stock markets has been driven by mega-cap stocks and the technology sector. This week, the market will focus on Jerome Powell’s testimony before Congress on Wednesday and Thursday, as well as the release of the non-farm payrolls figure for February on Friday. Today, the Nasdaq leads the gains with +0.20%, S&P -0.01%, and Dow -0.25%. In Europe, stock markets are operating with a mixed trend, awaiting the European Central Bank’s monetary policy decision on Thursday. The institution is expected to keep its reference rate unchanged. In Asia, the Nikkei 225 index set a new record, surpassing the 40,000-unit level. In the bond market, the 10-year Treasury bond stood at 4.23%, showing a slight increase in anticipation of Jerome Powell’s remarks and the employment figures to be published this week.

In commodities, the price of oil logs increases, reacting to OPEC’s decision to extend production cuts until the second quarter of the year. The price is at $79.63 per barrel. Meanwhile, gold prices anchored near a two-month high, following tepid U.S. economic data from last week, solidifying expectations for the Federal Reserve’s first interest rate cut of the year in June. The ounce is trading at $2,085. Silver is trading at $23.27, and copper at $387.10.

The exchange rate fluctuated during the night, reaching a minimum of 16.99 and a maximum of 17.02, currently trading at 17.01.

Corporate news

*Macy’s surged nearly 17% after Arkhouse Management increased its purchase offer for the department store chain to $24 per share, up from the previous $21, amounting to approximately $6.6 billion.

*Apple declined approximately 1% after the European Commission imposed a $1.95 billion fine. The antitrust penalty argued that the company abused its position in the music streaming app distribution market, favoring its own products over competitors’ alternatives.

*Spirit AeroSystems and Boeing increased by almost 3%. The companies reported on Friday that Boeing is in talks to acquire Spirit AeroSystems following quality issues affecting the 737 Max aircraft. Boeing spun off what became the current Spirit AeroSystems in 2005.