The Day at a Glance | November 8 2024

The Top

• China announced a fiscal stimulus package worth approximately $1.4 trillion (10 trillion Yuan).

• President-elect Donald Trump announced that Susie Wiles, one of his two campaign managers, will serve as his White House Chief of Staff.

• The Joe Biden administration will make a final push to broker deals to end the war in the Middle East, but Trump’s election may leave Washington with less negotiating power.

• Canada added 14,500 fewer jobs than expected in October, and wages for permanent employees increased, according to Friday’s data, as the economy struggles to absorb idle capacity due to rapid population growth in an overheated market.

• German opposition parties and business groups urged Chancellor Olaf Scholz to call for new elections quickly to minimize political uncertainty after the collapse of his unstable three-party coalition.

• Japanese household spending fell for the second consecutive month in September, according to government data on Friday, as higher prices dampened consumer appetite, a discouraging signal for the central bank’s plans to raise interest rates further.

• Oil prices fell on Friday as concerns eased over the impact of Hurricane Rafael on oil and gas infrastructure in the US Gulf, while investors also assessed China’s new economic stimulus measures.

Economic Environment

China announced a fiscal stimulus package worthapproximately $1.4 trillion (10 trillion Yuan). The world’s second-largest economy introduced a debt stimulus package to clean up debt-laden local government balance sheets and stabilize weak growth as it faces Donald Trump’s return to the White House. China’s Finance Minister, Lan Foam, said more stimulus measures are forthcoming, though China will not reveal them until Trump’s official inauguration next January. Additionally, China’s cabinet approved an extension of export credit insurance on Friday and increased support for commercial enterprises. Local governments currently face rising debt and declining revenues, with debt levels of local governments and other entities amounting to roughly 116.9% of GDP. However, these measures overlook the current issues in the real estate sector, which is estimated to need a stimulus package of about $3.2 trillion (23 trillion Yuan) to address unsold inventories and repay debts. The measure disappointed some experts in the Asian giant, who believe its economic impact may be limited as it focuses on debt repayment rather than job creation. More stimulus may emerge as January approaches. 

Markets and Companies

In the US market, futures for major indices show slight positive changes, pointing towards a week of significant gains driven by a 25-basis-point rate cut from the Fed and the prospect of a Republican government. In Europe, markets declined, affected by drops in mining stocks and political uncertainties in Germany, where the dismissal of the Finance Minister has destabilized the government. The recent rate cuts by the Fed and the Bank of England have also contributed to the volatility. In Asia, markets were mixed, with attention focused on China’s fiscal stimulus measures, which could allocate 6 trillion Yuan to support local governments.

In commodities, oil prices continue to fall due to Hurricane Rafael’s impact on the Gulf of Mexico, disrupting 391,000 barrels per day of US crude production. Gold prices stand at $2,694.33 per ounce, amidst the strong dollar and expectations regarding US monetary policy.

In fixed income, the yield on the 10-year Treasury bond declined to 4.32%, while the 2-year bond remains at 4.22%.

In Mexico, IPyC futures are trading higher at 52,701.0 points. Meanwhile, the exchange rate stands at 20.01 pesos per dollar, above yesterday´s 19.82 at market close.

Corporate News

• Airbnb reported revenues of $3.73 billion, slightly above estimates, with EPS at $2.13. For the final quarter, the company expects revenues between $2.39 and $2.44 billion. 

• Electric vehicle manufacturers like Lucid and Rivianreported losses per share of $0.28 and $0.99, respectively. Lucid Group reaffirmed its production target of 9,000 vehicles in 2024, while Rivian lowered its EBITDA forecast for the fourth quarter. 

• Pinterest, Inc. updated its revenue guidance below expectations despite exceeding estimates in its 3Q24 results. The company anticipates revenues between $1.13 and $1.15 billion.