The Day at a Glance | May 30 2024

The Top

• The U.S. economy grew less than previously estimated in Q1 2024, according to data from the Bureau of Economic Analysis (BEA).

• INEGI reported that Mexico´s unemployment rate stood at 2.6% in April 2024.

• China’s central bank said on Thursday that it would sell low-risk debt, including government bonds, when necessary, while paying close attention to current changes in the bond market and potential risks.

• The number of unemployment insurance claims in the U.S. rose from 216,000 to 219,000 in the week ending May 25^th.

• Japanese authorities are focusing their attention on more structural economic factors behind the yen´s persistent declines and are convinced that market intervention has limited capacity to reverse the currency’s fall.

• Oil prices remained virtually stable on Thursday, as markets wait for data on U.S. crude oil reserves, inflation data, and an OPEC+ meeting to decide on supply cuts for the rest of the week.

• The Dow Jones dropped 300 points due to a fall in Salesforce shares.

Economic Environment

The U.S. economy grew less than previously estimated in Q1 2024, according to data from the Bureau of Economic Analysis (BEA). According to the second of three estimates, Q1 2024 GDP was revised down from 1.6% to 1.3% on a seasonally adjusted annualized quarterly rate. The GDP revision was mainly due to lower household consumption. On an annual basis, the economy expanded by 2.9% in Q1 2024, a rate similar to the one observed in Q4 2023 at 3.1% and Q3 of last year at 2.9%. It´s worth noting that Q1 2024 growth was affected by two volatile events: 1) A spike in imports and 2) a negative inventory change. Therefore, these factors could boost growth in the coming quarters. At the time of writing this report, the Atlanta Fed’s GDPNowmodel estimates that the U.S. economy could grow by 3.5% in Q2 2024, a rate clearly higher than the one recorded in Q1 2024.

Markets and Companies

Global markets carry mixed sentiment. Main U.S. indices closed the previous day with losses. This morning, markets started the day in negative territory as Salesforce shares fell due to weak quarterly revenue results and a weak outlook. Additionally, key inflation data from the U.S. is expected to be released. Dow -0.92%, S&P -0.31%, and Nasdaq -0.32%. In Europe, markets are logging gains, with the Euro Stoxxup +0.35% after recording its worst sessions of the month in the last two days, with all its sectors operating in the green. In Asia, markets recorded losses: Japan’s Nikkei 225 fell -1.30% to close at 38,054.1, and China -0.62% to 3,091.7. In Mexico, the IPC opened lower, standing at 55,112.7 points. Oil prices decreased and currently stand at $78.86 per barrelwhile markets await the latest U.S. crude inventory data. Natural gas is down (-2.74%). Meanwhile, metals are mixed, with gold +0.4%, silver -0.7%, and copper -2.4%. Lastly, cryptocurrencies are up. The exchange rate fluctuated during the early morning, with a minimum of 16.89 and a maximum of 17.12, currently trading at 16.94.

Corporate News

Salesforce plummeted 16% after the company reported revenues that set below expectations and issued a guidance that did not meet expectations. 

• Kohl’s fell 20% after the department store chain reported a loss of 24 cents per share in the first quarter, while analysts expected a gain of 4 cents. 

• Foot Locker rose 12% after reporting first-quarter earnings that exceeded expectations.