The Day at a Glance | October 2 2024

The Top

• Gross fixed investment and private consumption in Mexico rebounded.

• The ADP private employment survey showed 143,000 jobs were created in September 2024, after five months of slowdown. The figure exceeded the consensus estimate of 120,000.

• The Eurozone’s unemployment rate stood at 6.4% in August, in line with market expectations and the previous month’s figure.

• Eurozone inflation fell from 2.2% in August to 1.8% in September, increasing expectations of a rate cut by the European Central Bank.

• On Wednesday, the Bank of England said that global asset prices remain strained and vulnerable to adjustments as investors grow more concerned about geopolitical risks.

• Oil prices rose more than 3% on Wednesday as Israel and the United States vowed retaliation for Iran’s most significant direct attack on its regional adversary, launching more than 180 ballistic missiles.

Economic Environment

Gross fixed investment and private consumption in Mexico rebounded. Gross fixed investment rose 6.4% year-over-year (y/y) in July, according to original figures. Construction increased 3.8% y/y, and machinery and equipment rose 9.5% y/y, also based on unadjusted figures. By sector, private investment increased by 7.8% y/y, while public investment decreased by -4.5% y/y. On a seasonally adjusted monthly basis, investment increased by -1.8% in July. Meanwhile, private consumption in Mexico logged an annual increase of 5.2% y/y in July, according to original figures. Spending on imported goods rose by 23.9% y/y, while spending on domestic goods and services increased by 2.7% y/y. On a seasonally adjusted monthly basis, private consumption rose by 0.8% in July, after a 0.1% increase was logged in June. Private consumption and investment increased in July´s annual comparison, after weakness was recorded in June. These figures are welcome, as growth expectations for 2024 had significantly decreased in previous months. However, it´ll be important to see if this positive trend continues or if it is an isolated occurrence.

Markets and Companies

The S&P 500 is down as a turbulent start to October continues. Yesterday, main US indices posted a negative session as rising tensions in the Middle East dampened risk appetite and investor enthusiasm. The Dow Jones dropped more than 170 points, while the S&P 500 and NasdaqComposite were down by 0.9% and 1.5%, respectively. This came after Iran fired ballistic missiles at Israel. Investors are bracing for greater uncertainty as Israel launches a ground operation in Lebanon and tensions escalate with the militant group Hezbollah, backed by Iran. Similarly, European stocks were negative on Wednesday afternoon as investors assessed the ongoing Middle East conflict and analyzed new unemployment data from the Eurozone. The Stoxx 600 was down 0.04% at 1:55 p.m. London time, with most sectors trading in the red. In Asia, Hong Kong’s Hang Seng index surged more than 6% on Wednesday, reaching a 22-month high, marking its sixth consecutive day of gains amidstgreater optimism about Beijing’s latest stimulus policies.

In commodities, US crude oil rose nearly 3% on Wednesday as investors feared that Israel might target Iran’s oil infrastructure in retaliation for the ballistic missile attack. Metals are mostly up, while cryptocurrencies are down. In Mexico, the IPC is down 0.73% and stands at 52,091 points. 

The exchange rate stands at 19.54.

On Monday afternoon, Walmex reported that the administrative proceeding initiated by COFECE against its main subsidiary has been fully documented. COFECE’s decision on a possible violation will be issued in the coming days. 

FEMSA announced the successful closure of its acquisition of Delek US Holdings’ retail operations, which include 249 convenience stores primarily located in Texas, as part of a transaction previously announced in August.

On September 30^th, GMéxico Transportes announced the acquisition of 60% of Golfo de Mexico Rail Ferry Holdings and Rail Ferry Vessel Holdings for USD $67.7 million through its subsidiary GMXT Marine. With this transaction, GMXT expands its control and strengthens the logistical infrastructure between southern Mexico and the United States.

Corporate News

• Humana shares plunged more than 22% after the healthcare company announced concerning preliminary Medicare Advantage data for 2025.

• Nike shares fell 7% after the athletic apparel and footwear company withdrew its full-year fiscal guidance. Nike, which reported better-than-expected earnings but missed revenue expectations for its fiscal first quarter, also postponed its investor day as its new CEO prepares to take office.