The Day at a Glance | September 11 2024

El Día en Minutos
11 septiembre, 2024, 2 meses ago
136

The Top

• In the US, CPI inflation surprised to the downside and set at 2.5% in August.

• In Mexico, the constitutional reform of the judiciary was approved, with 86 votes in favor and 41 against. The exchange rate stands at around 19.88 pesos per dollar at market open.

• In the US, the first presidential debate took place between Democratic candidate Kamala Harris and Republican candidate Donald Trump. At the end of the debate, the odds favored the Democratic candidate as the possible winner.

• On Wednesday, the US House of Representatives will vote on a six-month provisional funding bill less than three weeks before the government shutdown deadline.

• The Bank of Japan will continue to raise interest rates if inflation moves in line with its forecast, said policy official Junko Nakagawa, indicating that last month’s market drop has not derailed the bank’s plan to steadily increase rates.

• Oil rose more than 2% on Wednesday, recovering some of the losses logged the previous day, as a drop in US crude inventories and concerns over Hurricane Francine disrupting US production offset concerns about weak global demand.

• The S&P is in the red as markets digest new inflation data.

Economic Environment

In the US, CPI inflation surprised to the downside and set at 2.5% in August. The Bureau of Labor Statistics (BLS) released its consumer price index (CPI) inflation figures for August, showing a 0.2% m/m increase, according to seasonally adjusted figures. Nearly all of the monthly increase came from the housing component, which rose by 0.5% m/m, according to the BLS. On an annual basis, CPI inflation stood at 2.5% in August, below both our and the market’s expectation of 2.6%, and down from July´s 2.9%, according to original figures. Meanwhile, core inflation, which excludes energy and food, recorded a monthly increase of 0.3% m/m in August. On an annual basis, core inflation remained at 3.2% between July and August. CPI inflation figures show that inflation continues to decline, although core inflation still shows some persistence in staying above three percent. Nevertheless, the data is well-received by the market and contributes to the narrative of a potential rate cut by the Federal Reserve on September 18^th.

Markets and Companies

The S&P is in the red as markets digest new inflation data. The consumer price index report published today pointed to a 0.2% increase in prices last month, with an annual inflation rate of 2.5%, its lowest level since February 2021. Despite this, investors are still betting on a rate cut inthe Fed’s meeting on September 17^th-18^th. In Europe, markets are up; the Stoxx 600 rose 0.6% at 2:30 p.m. London time, with most sectors in the green. Tech stocks increased by 2.01%, while utilities fell by 0.09%. In contrast, Asian markets closed in the red, with the notable strengthening of the Japanese yen to its highest level against the dollar since January (141.68). Japan’s Nikkei led losses, dropping 1.49% to close at 35,619, marking its eighth consecutive day of losses. Regarding commodities, US crude oil rebounded by more than 2%, trading above $67 per barrel, recovering some ground after prices closed at their lowest level in nearly three years in the previous session. Metals are mostly posting positive figures, while cryptocurrencies are down. In Mexico, the IPC is down 0.05% and stands at 50,945 points.

The exchange rate is at 19.88 after closing at 20.09 yesterday.

Cemex sells its operations in Guatemala to HolcimGroup for USD $200 million. On September 10^th, Cemexannounced the sale of its operations in Guatemala to the Holcim Group for approximately USD $200 million. This transaction is part of a portfolio optimization strategy, with divestments of more than USD $2 billion in emerging market assets. The funds obtained will be allocated to developed markets such as the US, prioritizing aggregates, urban solutions, and cement focused on the circular economy and reducing carbon emissions.

Corporate News

• Shares of Trump Media & Technology fell more than 11% after the debate between Republican candidate Donald Trump and Democratic Vice President Kamala Harris.

• Shares of Dave & Buster’s rose more than 13% after exceeding last quarter’s earnings estimates by 15 cents per share.