The Day at a Glance | November 6 2024

The Top

• Donald Trump will be the next president of the United States. 

• The Citibanamex survey revealed that analysts anticipate that the Central Bank of Mexico will cut the funding rate by 25 basis points on November 14^th. 

• During the January to October period, 1,201,464 cars were sold in Mexico (+10.17% y/y), 3,412,955 light vehicles were produced (+5.54% y/y), and 2,923,823 units were exported (+6.82% y/y) in the Mexican automotive market. 

• Annual producer inflation in the Eurozone set in line with market estimates (-3.4% vs -2.3% prev.) in September. 

• Many Bank of Japan officials agreed that the economy was progressing toward meeting the necessary conditions for further rate hikes, though they supported a pause until global market uncertainties ease, according to the minutes from their September monetary policy meeting. 

• Oil prices fell on Wednesday as the US dollar recovered following Donald Trump’s election as president.

Economic Environment

Donald Trump will be the next president of the United States. Republican candidate Donald Trump won the presidential race, meaning he will return to the White House on January 20^th, 2025. In the vote count, Trump won in swing states like Pennsylvania, Georgia, and North Carolina. Additionally, Republicans gained control of the Senate by securing 51 votes, as there are 100 seats in total. The vote count for the House of Representatives is still underway. During the Asian trading session, the Mexican peso depreciated by about 2.5% to 20.62 pesos per dollar, although at times it traded at 20.73 pesos. Similarly, the dollar index rose by 1.62%, and futures for major US stock indices anticipate gains. 

The Citibanamex survey revealed that analysts anticipate that the Central Bank of Mexico will cut the funding rate by 25 basis points on November 14^th. The consensus of the Citibanamex survey estimates that real GDP growth for 2024 will set at 1.5% and 1.0% for 2025, unchanged from the previous survey. Regarding the funding rate, the consensus anticipates that the central bank will cut the rate by 25 basis points on November 14^th, bringing it to 10% by the end of 2024. By the end of next year, the survey estimates the funding rate could set at 8.0%. As for the peso-dollar exchange rate, it is expected to set at 19.80 at the end of 2024 and 20.21 at the end of 2025. For October´s inflation, a 0.52% m/m increase is forecast for general inflation and 0.32% m/m for core inflation, while for November, a 0.60% m/m increase is expected for general inflation and 0.24% m/m for core inflation. By year-end, inflation expectations for general and core inflation stand at 4.41% (previously 4.40%) and 3.80% (previously 3.80%), respectively. For 2025, expectations are 3.81% (previously 3.80%) and 3.70% (previously 3.70%), respectively.

Markets and Companies

US futures are set for a strong rally on Wednesday following Donald Trump’s presidential election victory. Dow Jones futures surged 1,346 points, or about 3.2%. Similarly, S&P 500 futures rose 2.3%, and Nasdaq 100 futures climbed 1.7%; the last time the Dow rose by more than 1,000 points in a single day was in November 2022. European markets continued to rise after Donald Trump defeated his Democratic rival Kamala Harris; the Stoxx 600 was up 0.9% at 12:20 p.m. London time, with most regional sectors gaining. Media stocks rose 2.2%, while the automotive sector led losses, down 2.2%. Meanwhile, Asian markets showed mixed movements following Wall Street’s rally ahead of US election results. In commodities, oil fell more than 2% due to a stronger dollar. Metals are down, while cryptocurrencies are up. In Mexico, IPyC futures are trading higher (+0.10%), and the index stands at 50,882 points.

The exchange rate stands at 20.66 pesos per dollar after closing at 20.09 yesterday.

Corporate News

• Tesla shares jumped 12% in pre-market trading as investors bet that Trump’s victory would benefit the company’s supporter and CEO, Elon Musk.

• Trump Media shares surged more than 30% following Trump’s presidential election victory.