MEXICO: Deputy FinMin Amador Says Economy Not Entering Recession
Jan-30 19:12
- Deputy Finance Minister Edgar Amador said that the economy is not entering into a recession despite the recent slowdown in growth, as he presented the Q4 public finance report today. Noting the risks from tariffs, Amador said that the government can’t calculate the effect of potential US tariffs on the country without details. Amador said that the downturn in manufacturing is temporary and that the sector had showed improvement in November.
- The economy grew by 1.5% last year, he said, driven by consumption and investment, with the former rising by 3.5% y/y in the Jan-Oct period and the latter by 4.7%. Meanwhile, tax revenue reached a record 14.6% of GDP in 2024, despite a 15.1% y/y decline in real oil revenues.
- Reporting on the weak Q4 GDP data, BBVA says that the decline in industry is the largest since the start of the pandemic, driven by weak construction. They expect the weakness in activity to extend through this year, in a context of high uncertainty for investment. They maintain a 1.0% GDP forecast for this year, with a downward bias.
- The Mexican peso remains resilient today, despite the soft data, with USDMXN 0.5% lower on the session around 20.40, continuing to respect the well-established short-term parameters of 20.10-90.
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COMMODITIES: WTI Futures, Gold Holding Higher
Dec-31 18:47
WTI futures are trading higher today as the contract extends recent gains. A stronger reversal to the upside would refocus attention on key short-term resistance at $76.41, the Oct 8 high. Initial firm resistance is unchanged at $71.97. A bear threat in Gold remains present. The yellow metal traded sharply lower on Dec 18 and the move undermines a recent bull theme. A resumption of weakness would open key support at $2536.9, the Nov 14 low.
- WTI Crude up $0.9 or +1.27% at $71.88
- Natural Gas down $0.32 or -8.13% at $3.618
- Gold spot up $19.24 or +0.74% at $2625.86
- Copper down $6.95 or -1.7% at $402.3
- Silver down $0.1 or -0.34% at $28.8383
- Platinum up $3.96 or +0.44% at $908.02
US STOCKS: Late Equity Roundup: Tech & Interactive Media Sectors Underperforming
Dec-31 18:36
- Stocks are trading near session lows after reversing early session gains. Though off this year's record highs (SPX Eminis 6178.75, DJIA 45,073.63, Nasdaq 20,204.58) major averages will finish the year with double digit gains: SPX Eminis +19.5%, DJIA +13.1%, while the Nasdaq gained 29.9%!
- Currently, the DJIA trades down 92.19 points (-0.22%) at 42474.46, S&P E-Minis down 28 points (-0.47%) at 5929.75, Nasdaq down 147 points (-0.8%) at 19337.13.
- Information Technology and Communication Services shares underperformed continued to underperform late Tuesday, shares of software and semiconductor makers weighing on the tech sector: Nvidia -1.61%, Advanced Micro Devices -1.36%, Crowdstrike Holdings -1.28%.
- Interactive media and entertainment shares weighed on the Communication Services sector: Alphabet -0.9%, Live Nation -0.76%, Netflix -0.60%, Meta -0.41%.
- On the positive side, Energy and Materials sectors outperformed in the second half, oil & gas stocks buoyed the Energy sector as crude prices continued to rise (WTI +1.0 at 71.99): APA Corp +3.59%, Marathon Petroleum +2.46%, Occidental Petroleum +2.15%.
- Meanwhile, shares of chemical & fertilizer makers supported the Materials sector: Mosaic +2.44%, Celanese +1.42%, Dow +1.37%.
- Looking ahead, the next round of quarterly earnings kicks off mid-January with Blackrock, Bank of NY Melon, Wells Fargo, JP Morgan, Goldman Sachs, Citigroup, US Bancorp, M&T Bank and PNC all reporting between January 13-16.
STIR: FED Reverse Repo Year-End Operation Usage Jumps to Late June Level
Dec-31 18:22
RRP usage surged to the highest level since June 28 into year end: $473.460B this afternoon from $260.743B Monday. Compares to $98.356B on Friday, December 20 - the lowest level since mid-April 2021. The number of counterparties jumped to 80 from 57 prior.
