The Day at a Glance | May 14 2024

The Top

• In the United States, April´s annual producer inflation rate set in line with the consensus estimate.

• On Tuesday, U.S. President Joe Biden unveiled a package of tariff increases on electric vehicles (100% vs. 25% prev.), electric batteries (25% vs. 7.5% prev.), solar cells (50% vs. 25% prev.), steel (25% vs. 0% prev.), and aluminum (25% vs. 7.5% prev.).

• According to a Reuters survey, China´s central bank is widely expected to leave the financing rate (1Y MLF) unchanged when it renews the medium-term loans maturing on Wednesday.

• Kazuo Momma, a former executive at the Bank of Japan, says the central bank could reduce bond purchases in June and raise interest rates in September.

• Oil remains stable after OPEC kept its global demand forecasts unchanged, and investors await U.S. inflation data.

• GameStop soars +119%, driven by the resurgence of “Roaring Kitty”.

Economic Environment

In the United States, April´s annual producer inflation rate set in line with the consensus estimate. In April, the producer price index increased by 0.5% m/m, after falling by -0.1% in March and rising by 0.6% in February, according to seasonally adjusted figures. Examining the main components of the index, we find that April’s figure is explained by a 0.6% increase in services, the largest since July 2023, and a 0.4% increase in demand goods. Regarding the categories with the most significant upward impact on producer inflation in April, portfolio manager services, as well as the indexes for machinery and equipment, real estate, automobiles, and transportation, all increased. Meanwhile, airline prices decreased. On an annual basis, producer inflation was 2.2% in April (prev. 1.8%), in line with the market´s forecast and according to non-seasonally adjusted figures. Core producer inflation, which excludes food and energy prices, increased by 0.5% monthly and 2.4% annually. Cost pressures are beginning to increase, as the annual rate was just 1.0% in January and set slightly above 2.0% in April; however, this result was already expected by the market. Tomorrow, April´s consumer price index will be published, and the consensus expects a 3.4% y/y figure.

Markets and Companies

Major U.S. indices closed mixed the previous day. This morning, markets were up following the latest inflation data in the U.S.: Dow +0.15%, S&P +0.01%, and Nasdaq+0.11%. In Europe, markets retreated, with the Euro Stoxxdown -0.10% and sectors trading mixed. Travel and leisure stocks fell by -1.0%, while automotive stocks rose by +1.2%. In Asia, markets closed mixed, with Japan’s Nikkei 225 up +0.46% at 38,356.06, and China down -0.07%. In Mexico, the IPC opened in the green, standing at 57,895.3 points, up +0.28%. Oil prices decreased and are currently priced at $78.54 per barrel as U.S. inflation data was digested, and the market awaits the OPEC´s monthly report.Natural gas is down (-1.81%). Meanwhile, metals mostly increased, with gold up +0.6%, silver up +1.4%, and copper up +2.3%. Lastly, cryptocurrencies are down.

The exchange rate fluctuated overnight, reaching a low of 16.77 and a high of 16.84, currently trading at 16.83.

Corporate News

• GameStop surged by +119% after “Roaring Kitty” posted for the first time in three years.

• AMC soared by 105%, while Reddit and Robinhoodrose by 4.6% and nearly 7%, respectively.

• Alibaba fell by 4% after reporting an 86% drop in profits. However, it exceeded revenue expectations.

• Sony increased by 3.5% after posting quarterly earnings that surpassed consensus estimates.