The Day at a Glance | May 17 2024

The Top

• China’s economic indicators show mixed signals regarding the Asian giant´s economic recovery. 

• China announced “historic” measures on Friday to stabilize its crisis-hit real estate sector: The central bank provided 1 trillion yuan ($138 billion) in additional financing and eased mortgage regulations.

• ECB Vice President Luis de Guindos said on Friday that price pressures in the Eurozone continue to diminish, giving policymakers greater confidence that inflation will reach its target next year.

• The Bank of Japan could face more pressure to raise interest rates as the yen’s weakness affects consumer spending.

• Oil prices remained steady on Friday; the Brent is heading for its first weekly gain in three weeks amidstexpectations of greater demand from China and the U.S.

Economic Environment

China’s economic indicators show mixed signs regarding the Asian giant´s economic recovery. Industrial production recorded 6.7% year-on-year growth, well above the 5.4% year-on-year estimated by the analysts´ consensus and the 4.5% logged in March. By components, manufacturing, services, and mining accelerated compared to the previous month. Regarding consumption, retail sales increased 2.3% year-on-year during April; however, this reading compares negatively against the previous 3.1% figure and the consensus expectation of 3.8%. Even though sales slowed in April, the indicator marked 15 consecutive months of growth. Additionally, fixed investment increased by 4.2% in the first four months of 2024 compared to the same period of last year. Lastly, new home prices in China decreased by -3.1% in April, falling for the tenth consecutive month. Overall, China’s economic indicators showed outstanding performance in industrial production due to strength in the manufacturing sector, which was driven by increased foreigndemand. However, consumption slowed down, and the real estate sector continues to be a drag on China’s economic recovery, adding more pressure on Chinese officials to provide greater stimulus for the economy.

Markets and Companies

Main U.S. stock indices are logging mixed figures following yesterday’s decline; however, markets are recording positive performance this week, driven by U.S. inflation figures released earlier in the week, which support expectations that the Federal Reserve will make two interest rate cuts this year. Additionally, quarterly results have boosted the market, with Q1 2024 earnings estimated to have increased by about 7.4% year-over-year, with 77% of companies reporting above expectations. In Asia, markets logged mixed performance, highlighted by the announcement that the Chinese government would take additional measures to support the real estate sector. In Europe, stock markets were down.

The 10-year Treasury bond yield stood at 4.40, recording a 2.7 base point increase. 

In Mexico, the IPC index is trading higher, standing at 57,501.6 points.

The exchange rate of the peso against the dollar stands at 16.67, after closing at 16.69 yesterday.

Sigma Alimentos announced the redemption of $600 million of the total principal amount of its 4.125% Senior Notes due in 2026. The remaining amount of notes outstanding is $400 million. With this, Sigma extended the average debt maturity from 4.1 years to 4.6 years.

Corporate News

• Reddit shares increased after the company announced a partnership with OpenAI.

• According to media reports, Snowflake is looking to acquire the startup Reka AI for around $1 billion.

• GameStop shares declined after the company announced it would sell 45 million shares and reported results that set below estimates.

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