The Day at a Glance | September 2 2024

The Top

• In China, August PMI´s logged weakness, increasing pressure for more consumer stimulus. 

• Today, US markets are closed for the Labor Day holiday. 

• The Eurozone´s manufacturing PMI stood at 45.8 points in August, slightly above the market expectation of 45.6 and unchanged from the level observed in July. 

• In Japan, the manufacturing activity PMI stood at 49.8 points in the eighth month of the year, slightly above the 49.1 units recorded in July. 

• Oil prices extended losses from the end of last week due to expectations of higher OPEC+ production starting in October, while signs of weak demand in China and the US raised concerns about consumption.

Economic Environment

In China, August PMI´s logged weakness in manufacturing, increasing pressure for more consumer stimulus. China’s composite PMI stood at 50.1 points in August, down from 50.2 in July and 50.5 in June. Meanwhile, the non-manufacturing PMI reached 50.3 points, marking twenty consecutive readings above the 50-point threshold, yet showing signs of slightly stronger momentum as it accelerated marginally compared to July (50.2 prev.). On the other hand, the manufacturing PMI fell from 49.4 points in July to 49.1 in August, slightly below the market expectation of 49.2. As a result, the manufacturing indicator remained below the 50-point threshold for four consecutive months, indicating a contraction. Overall, China’s manufacturing activity hit its lowest level in six months in August, linked to falling factory prices and difficulties in securing orders, pressuring Chinese officials to move forward with plans to direct more stimulus to households. After a slightly slower second quarter, the world’s second-largest economy signaled that it was ready to diverge from its usual playbook of investing funds in infrastructure projects and instead focus on new household stimulus.

Markets and Companies

US markets are closed for Labor Day. US markets are closed on Monday after posting a positive week on Friday. The S&P 500 posted its fourth consecutive month of gains on Friday, and the Dow Jones reached a new all-time high. In Europe, stocks are down as the first trading day of September begins. The Stoxx 600 was down -0.16% at 1:44 p.m. London time, with most sectors trading in the red. Retail stocks were down 0.95%, while telecommunications was one of the few sectors gaining, up 0.67%. In Asia, markets logged mixed movements; China’s manufacturing fell to a six-month low, and the CSI 300 hit a seven-month low. Regarding commodities, oil prices extended their losses on Monday as investors weighed a rise in OPEC+ production from October against a sharp drop in Libyan production and weak demand in China and the US, the world’s two largest oil consumers. Metals and cryptocurrencies are logging mixed figures. In Mexico, the IPC is up +0.48% and stands at 52,238 points. 

Over the weekend, the exchange rate fluctuated between a low of 19.63 and a high of 19.76, currently trading at 19.73. 

Nemak secured a bank financing of $250 million, which will be used to refinance short-term debt, extending the debt maturity profile to 4.8 years. The loan has a 5-year term and is denominated at a variable rate based on SOFR.

Corporate News

• On Friday, Intel shares rose about 9.5% after thecompany stated it´s working with bankers to explore options to address weaknesses in its core business.

• Elastic NV shares plunged about 26.5% on Friday after its second-quarter revenue forecast missed Wall Street’s expectations.