The Day at a Glance | May 6 2024

The Top

• Producer prices in the Eurozone remain in deflation territory.

• French President Emmanuel Macron and EU Commission Chief Ursula von der Leyen urged China to ensure more balanced trade at the beginning of President Xi Jinping’s visit to Paris; Macron also pressed him regarding Ukraine.

• The European Central Bank is increasingly confident about cutting interest rates as the Eurozone´s inflation continues to decline.

• Israel attacks the city of Rafah in Gaza following the evacuation order; oil prices rise.

• Stocks in the US are up; Wall Street seeks to maintain the previous session´s positive momentum. 

Economic Environment

Producer prices in the Eurozone remain in deflation territory. In March 2024, producer prices fell by -0.4% month-on-month in the Eurozone, after dropping by -1.1% m/m in February and -0.9% m/m in January. In their year-on-year comparison, producer prices in March fell by -7.8%, setting slightly below the market´s -7.7% estimate, although above February and January´s -8.5% and -8.1% respectively. In its main categories, deflation was recorded in energy (-20.0% y/y) and intermediate goods (-4.8% y/y), while capital goods (1.9%), durable goods (1.0%), and non-durable goods (0.9%) recorded increases. Excluding energy-related goods, producer prices logged 0.2% month-on-month and -1.5% year-on-year figures. The block´s main economiesremained in deflation territory in their year-on-year comparison during March: Germany at -2.9% (prev. -4.1%), Spain at -8.2% (prev. -8.6%), France at -7.5% (prev. -5.5%), and Italy at -12.7% (prev. -14.2%). Producer price figures are consistent with expectations of lower inflation in the Eurozone in the coming months, suggesting that the June´s expected decline could materialize.

Markets and Companies

Stocks in the US are up; Wall Street seeks to maintain the previous session´s positive momentum. On Friday, the Dow, the S&P 500, and the Nasdaq rose by more than +1% after the release of new nonfarm payrolls data, which revealed fewer than expected job additions in April, along with an increase in unemployment. This eased concerns about an overheated economy, leading investors to speculate that the Fed could begin to cut rates sooner than anticipated. In Europe and Asia, stocks follow the positive momentum seen on Wall Street after Friday´s US labor data. In Mexico, the IPC is up (+0.45%), reaching $57,394 points. Regarding commodities, US crude oil is up on Monday, attempting to recover from the steep declines recorded last week, after Israel ordered Palestinians to evacuate the southern city of Rafah in Gaza, and Saudi Aramco increased its crude oil prices. Lastly, cryptocurrencies show mixed figures, and metals are up: gold +1.0%, silver +2.8%, copper +1.5%.

Over the weekend, the exchange rate fluctuated between a minimum of 16.90 and a maximum of 17.02, currently trading at 16.90.

Corporate News

• Berkshire Hathaway’s stocks rise +1.2% this morning after the conglomerate recorded a +39% growth in its operating profit compared to the previous year. The business led by Warren Buffet also saw its cash reserves increase to record levels, nearing $200 billion.

• Shares of Spirit Airlines, a low-cost airline, fell 4% in the pre-market. It reported a loss of $1.46 per share in the first quarter.