The Day at a Glance | May 8 2024

The Top

• The Citibanamex survey forecasts that Banxico´s next rate cut will take place in June. 

• Tomorrow, April´s inflation data will be published; we estimate a 0.21% biweekly increase and a 4.67% y/y increase. 

• German industrial production decreased in March, although less than expected thanks to construction, according to data from the Federal Statistical Office released on Wednesday.

• The Bank of Japan could carry out monetary policy measures if the yen’s decrease significantly affects prices, Governor Kazuo Ueda said on Wednesday.

• Oil prices are down as industry data showed an increase in crude and fuel inventories in the US and the strengthening of the US dollar, indicating that oil demand is under pressure.

• US tech are down this morning.

Economic Environment

The Citibanamex survey expects Banxico´s next rate cut to occur in June. Yesterday, Citibanamex´s financial markets expectations survey was published, before April´sinflation data is made known. The consensus expects a 0.18% biweekly increase in general inflation and a 0.24% biweekly rise in core inflation, while for May, they estimate a -0.12% biweekly decrease in general inflation and 0.27% in the core component. For the next 12 months, they estimate that annual inflation will set at 3.85%, below the 3.91% reported 15 days ago. Regarding year-end figures, general and core inflation estimates are set at 4.17% and 4.10%, respectively. Regarding the funding rate, the consensus expects it to close the year at 10.0%, unchanged from the previous survey, and most participants anticipate that the next 25 bp rate cut will take place in June. The exchange rate is expected to close 2024 at 17.90 pesos per dollar and at18.80 pesos per dollar in 2025. Real GDP growth for 2024 is forecasted at 2.2% and at 1.8% for 2025. 

Markets and Companies

US tech stocks are down Wednesday morning. Pressure is weighing on various tech companies, which could lead the Dow Jones and the S&P 500 to break their recent winning streaks. The Dow Jones has been on a five-day winning streak, its longest since December; while the S&P 500 has gained ground for four consecutive days. Additionally, investors will receive a wave of comments from the Federal Reserve today. In Europe, markets are mostly up, due to positive corporate reports; the Stoxx 600 was up 0.1% at 2:10 p.m. London time, with sectors trading in mixed territory. Food and beverage stocks were up 1.6%, while autos were down 1.8%. In Asia, Japan’s stocks led the region’s declines, while investors analyzed quarterly reports; the Nikkei index fell 1.63% to its lowest level in two weeks. As for commodities, oil prices are down as the market weakens due to an increase in inventories. Metals and cryptocurrencies are down, and in Mexico, the IPC is down -0.35% and stands at 56,907 points.

After yesterday’s trading session, the exchange rate fluctuated between a minimum of 16.88 and a maximum of 16.97, currently trading at 16.94.

Yesterday marked the start of the 2024 Construction Startup Competition, the largest competition, networking, and platform event for startups in the construction and greentechnology industries. Prominent industry players and venture capital firms such as Cemex Ventures, Caterpillar, Dysruptek from Haskell, Ferrovial, Hilti, Leonard from the VINCI Group, NOVA from Saint-Gobain, Trimble, and Zacua Ventures launch the open call for innovative startups from around the world as hosts of the 8th edition of the Construction Startup Competition. The Construction Startup Competition promotes innovation, collaboration, and technology adoption with solutions falling into the competition’s 4 focus areas: Sustainable Construction (sustainability), Enhanced Productivity (efficiency), Construction Supply Chain (timeliness), and Future of Construction (disruptive).

Corporate News

• Uber shares fell 8.5% after the company reported a surprising net loss and weaker-than-expected revenue.

• Intel was down more than 2% after the chipmaker reduced its revenue guidance for 2Q24.

• Tesla shares fell 4% after Reuters reported that US prosecutors are investigating whether the company committed wire fraud as part of a probe into Tesla’s Autopilot systems.

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