The Day at a Glance | November 27 2024

The Top

• Mexico’s trade balance logged a slight surplus in October.

• Minutes from the Federal Open Market Committee revealed some members suggested pausing monetary easing if inflation remains high, while others signaled it could accelerate if the labor market weakens or the economy stagnates.

• The US economy expanded at an annualized rate of 2.8% in 3Q24, in line with estimates (previous: 3.0%). Later today, October’s PCE inflation figures are expected to increase to 2.3% from September’s 2.1%.

• A ceasefire between Israel and Hezbollah, backed by Iran, will take effect Wednesday after both parties accepted a deal brokered by the US and France, President Joe Biden announced on Tuesday.

• For the week ending November 23^rd, US initial unemployment claims were 213,000 (expected: 216,000), remaining unchanged from the prior week.

• The Bank of Japan reported record losses on its holdings of government bonds during the first half of the fiscal year, driven by rising bond yields due to its interest rate hikes, according to Wednesday’s earnings report.

• Oil prices remained stable on Wednesday as markets assessed a ceasefire deal between Israel and Hezbollah while anticipating Sunday’s OPEC+ meeting, where the group may delay a planned increase in oil production.

Economic Environment

Mexico’s trade balance logged a slight surplus in October. In October 2024, a trade surplus of just $371 million USD was reported, contrasting with a $369 million USD deficit from the same month last year. Total exports increased 11.2% year-over-year (y/y), driven by a -24.2% drop in oil exports and a 13.5% rise in non-oil exports. Among non-oil exports, agricultural products rose 3.1% y/y, mineral extraction exports rose 57.1% y/y, and manufacturing exports increased 13.2% y/y. Imports also increased by 9.7% y/y in October, indicating a -18.3% drop in oil imports and a 12.0% rise in non-oil imports. By category, consumer goods, intermediate goods, and capital goods imports increased by 3.1% y/y, 11.6% y/y, and 5.8% y/y, respectively. For the January–October 2024 period, the trade balance recorded a deficit worth $10.646 billion USD, compared to a $10.295 billion USD deficit in the same period last year. Overall, the trade balance figures suggest there´s a recovery in the export sector, despite a decline in US industrial production in October. Consequently, the trade deficit for the entirety of 2024 is likely to be similar to last year’s.

Markets and Companies

US futures are little changed as Wall Street awaits the release of the Federal Reserve’s favorite inflation indicator; the personal consumption expenditures (PCE) price index will be published this morning.

In Europe, investors continue to assess the potential impact of President-elect Donald Trump’s plans to raise tariffs. The Stoxx 600 was down 0.3% by midday, with all sectors in negative territory except for media, food and beverages, and financial services.

Meanwhile, Asia-Pacific markets recorded mixed results as investors evaluated industrial data from China and inflation figures from Australia.

In commodities, oil prices held steady on Wednesday as markets assessed a ceasefire agreement between Israel and Hezbollah and anticipated Sunday’s OPEC+ meeting, where the group might delay a planned increase in oil production.

Metals and cryptocurrencies are up. In Mexico, IPC futures are trending higher (+10%).

The exchange rate stands at 20.70 after closing at 20.67 yesterday.

Corporate News

• Dell Technologies shares fell more than 12% after the PC maker reported that it expects fourth-quarter revenue and earnings below Wall Street expectations.

• HP shares dropped 8% due to a disappointing earnings guidance.

• Workday shares declined approximately 11% after the company issued a weak forecast for the fourth quarter.