July 2024 Commentary
Market Overview
July 2024 was flooded with economic and political headlines; from the cooling of the U.S. economy to the elections in Venezuela, it was a busy summer month of uncertainty in the market. The U.S. FOMC decided to keep rates unchanged, citing that “economic activity has continued to expand at a solid pace” and “job gains have moderated” while inflation has made progress towards the 2% goal. The committee maintained the target rate at 5.25-5.5%. The latest CPI numbers for June 2024 showed a 0.1% decrease, including gasoline, which fell 3.8%, bringing the CPI over the last 12 months to 3.00%. The unemployment rate for the U.S. increased to 4.3% in July, while the economy added 114,000 jobs, lower than expectations. The repo rate was unchanged compared to June, ranging from 5.25 to 5.40. According to the BEA estimated release, U.S. GDP for Q2 2024 was 2.8%, up from 1.4% in Q1 2024. This figure may be revised at the end of August.
China became the leading supplier of vehicles to Mexico with sales of USD 4.6 billion, surpassing the U.S. 2023 figure of USD 4.4 billion. The Ministry of Economy also stated that during the first five months of 2024, automobile imports from the U.S. decreased by 13.9% while China’s increased by 50.8%. Additionally, the IMF released the first interview for the World Economic Outlook and projected Mexico’s GDP to increase by 2.2% this year, down from 3.2% in 2023.
The eurozone’s annual inflation was 2.6% in July, up from 2.5% in June, with services bringing in the biggest increase. The HSBC India Manufacturing PMI posted 58.1 in July, down from 58.3 in June, citing the fastest expansion in international sales for over 13 years and significant job creation.
