The Day at a Glance | May 19 2025

• In China, economic indicators recorded weakness in April.

• The Timely Indicator of Economic Activity (IOAE) estimates that the Mexican economy could expand0.2% y/y in March and 0.7% y/y in April.

• In a decision made at the end of last week, rating agency Moody’s downgraded the U.S. credit rating by one notch, from Aaa to Aa1, while revising the outlook from negative to stable.

• The European Commission estimates that the Eurozone will grow more slowly than it previously expected in November of last year, revising its 2025 growth forecast from 1.3% to 0.9%.

• The Bank of Japan will continue raising interest rates if the economy recovers from the impact of tariffs, said Deputy Governor Shinichi Uchida, while warning of an uncertain outlook.

• Oil prices declined at the market open following the U.S. credit rating downgrade by Moody’s and weaker-than-expected industrial production and retail sales data from China.

Economic Environment

In China, economic indicators recorded weakness in April. Industrial production in the Asian giant expanded6.1% y/y in April, slightly above the 5.9% y/y consensus estimate and below March’s 7.7% y/y figure. Within the data, manufacturing expanded 6.6% year over year, with computing and technology standing out with a 10.8% increase. On the other hand, retail sales rose 5.1% y/y, below the market expectation of 6.0% and March’s 5.9% result. Meanwhile, fixed asset investment excluding rural assets increased 4.0% y/y in the January–April period, coming in below the 4.3% expected by consensus. Within investment, residential construction plunged 10.3% y/y. Overall, April’s figures logged a broad-based slowdown across the economy. While industrial production weakness had already been anticipated given the economic environment characterized by high tariffs and escalating trade tensions between the U.S. and China, the figures could improve going forward with the recent trade agreement between both countries.

Markets and Companies

U.S. markets are down this morning after a downgrade of the country’s credit rating by Moody’s triggered a spike in Treasury yields. On Friday, after market close, Moody’s cut the U.S. debt rating by one notch, from Aaa to Aa1.

In Europe, stocks continued their downward trend following the agreement between the United Kingdom and the European Union to reset post-Brexit relations. As of 12:17 p.m., the Stoxx 600 was down 0.6%.

Meanwhile, Asian markets declined on Monday as investors assessed the latest economic data from China and the recent U.S. credit rating downgrade by Moody’s.

In commodities, oil prices were little changed, with investors watching the outcome of U.S.-Iran talks and key economic data from China to assess the impact on commodity demand following recent trade tensions with the U.S.

Gold prices are up, boosted by a weaker dollar and renewed safe-haven demand after Moody’s downgraded the U.S. government’s credit rating.

In Mexico, the IPC is trading lower (-0.16%).

Over the weekend, the exchange rate fluctuated between a low of 19.42 and a high of 19.56. It’s currently at 19.43.

The National Association of Self-Service and Department Stores (ANTAD for its acronym in Spanish) reported April´s sales figures. In April, same-store sales, which include stores with more than a year of operation, rose 2.4% in nominal terms. Total-store sales, which include both existing stores and those opened in the last 12 months, increased 5.1% compared to the same period last year.

FEMSA announced it signed a USD $250 million accelerated share repurchase agreement (ASR), with an initial delivery of 483,559 ADS scheduled for May 20^th, 2025. The final number of shares to be repurchased will be determined based on the volume-weighted average price during the term of the agreement, minus a discount. Final settlement is expected no later than the third quarter of 2025.

Corporate News

• Walmart’s stock fell nearly 2%. On Saturday, President Donald Trump said Walmart should “eat the tariffs” and not raise prices. Treasury Secretary Scott Bessent said on NBC’s “Meet the Press” Sunday that CEO Doug McMillon assured him the company would absorb some of the levies.

• Netflix’s stock fell 1.8% following a downgrade by JPMorgan, which lowered its rating from “overweight” to “neutral.” The bank noted that while it maintains a long-term positive outlook, the adjustment reflects the stock’s strong recent performance.