The Day at a Glance | November 14 2024

The Top

*Mixed figures in the Eurozone´s economic activity at the end of 3Q24.

*In the United States, PPI inflation rose in October.

*Today at 1:00 pm, the Central Bank of Mexico will announce its monetary policy decision, where we estimate a 25-basis-point cut to bring the benchmark rate to 10.25%.

*According to Reuters, banker Howard Lutnick has become a serious contender alongside investor Scott Bessent for the position of US Treasury Secretary in Donald Trump’s new administration.

*In the week ending November 9th, initial unemployment insurance claims in the US were 217,000 (223,000 vs expected), marking a decline of 4,000 from the previous week’s 221,000.

*Oil prices held steady on Thursday after declines earlier in the week due to a stronger US dollar and concerns about rising supply amid slow demand growth.

Economic environment

Mixed figures in the Eurozone´s economic activity at the end of 3Q24. Economic activity in the Eurozone expanded by 0.4% quarter-over-quarter, in line with consensus estimates. Annually, the Eurozone´s economy recorded a 0.9% increase, accelerating from the 0.6% observed in 2Q24. Additionally, industrial production figures for the European block were released, showing a -2.0% month-over-month decline (prev. -1.5%). This negative performance was driven by declines in capital goods (-3.8% m/m) and energy (-1.5%), while durable consumer goods increased (0.5% m/m), nondurable consumer goods rose (1.6% m/m), and intermediate goods stagnated. On an annual basis, Eurozone industrial production fell by -2.8% in September, with three out of its five components declining. Notably, the annual drop was mainly due to capital goods (-6.4%), intermediate goods (-2.6%), and nondurable consumer goods (-1.7%), while the production of durable consumer goods and energy rose by 4.8% and 1.9%, respectively. Additionally, the main economies within the European block also logged year-over-year declines in September, with Germany down -4.5% (prev. -2.8%), France down -0.7% (prev. 0.9%), and Italy down -4.0% (prev. -3.2%). Overall, the Eurozone´s economy expanded at a moderate pace, keeping hopes of a soft landing alive after a year of near-zero growth; however, industrial activity continues to show weakness as of the end of 3Q24.

In the United States, PPI inflation rose in October. The Bureau of Labor Statistics (BLS) released its Producer Price Index (PPI) inflation data for October, which recorded a monthly increase of 0.2%, in line with the market´s forecast of 0.2% m/m and above the previous month’s 0.1% m/m. Core PPI inflation, which excludes food and energy, recorded a monthly increase of 0.3% m/m in October (prev. 0.2% m/m). Annually, PPI inflation stood at 2.4% (prev. 1.9%), and core PPI at 3.0% (prev. 2.9%). Overall, producer price inflation data indicates that cost pressures are once again rising, although not yet to concerning levels. The data does not alter expectations of a 25-basis-point cut in the federal funds rate on December 18th.

Markets and companies

US index futures were slightly up on Thursday as investors digested October´s CPI inflation data (0.3% monthly, in line with expectations) and PPI inflation (0.2% monthly). European markets are also rising, with announcements from Burberry and Siemens Energy improving outlooks. Lastly, in Asia, markets recorded declines. Hong Kong’s Hang Seng led the drops, while China’s CSI 300 fell 1.73%. In Japan, the yen weakened to its lowest level in four months against the dollar, indicating uncertainties regarding monetary policy.

In the commodities market, crude oil prices posted gains following declines earlier in the week. The strength of the dollar, which reached its highest level in a year, and the rise in US Treasury yields have exerted downward pressure on oil prices. Additionally, the US Energy Information Administration (EIA) slightly revised up its global crude production forecast for 2024, contributing to an abundant supply scenario amid moderate demand. Meanwhile, gold prices are down, reaching an eight-week low.

In fixed income, the yield on the 10-year US Treasury stands at 4.47%, while the 2-year yield is at 4.30%.

In Mexico, IPyC futures are trading up at 50,955.0 points. Meanwhile, the exchange rate is 20.64 pesos per dollar, above yesterday´s 20.55 at market close.

Corporate news

*Disney reported its quarterly results, highlighting 14% year-over-year growth in its entertainment segment. Looking ahead, the company expects high single-digit revenue growth for 2025.

*The semiconductor manufacturer AMD announced it would reduce its global workforce by approximately 4%. At the end of 2023, the company had 26,000 employees.

*German energy company Siemens Energy updated and improved its medium-term financial targets, which investors welcomed.