Uriel Loredo

Week: October 13–17 

Markets showed a mix of recovery signs and new challenges, driven by trade tensions, monetary policy decisions, and corporate earnings. 

United States 

• Tensions with China escalated following new statements from President Trump. 
• Chair Powell suggested the end of the tightening cycle, opening the door to potential rate cuts. 
• Banks reported solid earnings, though volatility persists among regional banks. 

Europe 

• German investor confidence rose less than expected. 
• The U.K. economy grew 0.1% in August, but with downward revisions to prior data. 
• The IMF urged the Bank of England to remain cautious, as inflation is expected to stay the highest in the G7. 

Asia 

• In China, exports rose 8.3% year-over-year in September, the fastest pace in six months. 
• Inflation fell again (-0.3%), reflecting weak domestic demand and ongoing trade tensions. 
• Producer prices dropped 2.3% annually. 

Latin America 

• In Brazil, the economy expanded 0.4% in August, below expectations. Analysts expect a deeper slowdown as monetary policy remains tight. The Central Bank maintained its benchmark rate at 15%. 
• In Mexico, the IMF projects a fiscal deficit of 3.9% of GDP for 2025 — the highest since 2000. The government is assessing potential tariff adjustments for 2026, depending on U.S.–China trade developments. 

“Risk comes from not knowing what you are doing.” — Warren Buffett 

Key Upcoming Events: 

• China: GDP, industrial production, and retail sales data — October 20 
• United States: Consumer prices and new home sales — October 24 

Monitor: 

Week October 6–10 

Markets opened October with mixed signals. Attention focused on the ongoing U.S. government shutdown, revised growth forecasts in China and Mexico, and stronger trade performance in Brazil. In Asia, Japan saw a historic political shift with the election of Sanae Takaichi as leader of the ruling party, while Europe faced renewed political instability. 

United States: 

• The government shutdown remains unresolved. 
• Gold surpassed $4,000 amid political and fiscal uncertainty. 
• The Fed signaled openness to rate cuts, though doubts persist about their extent. 

Europe: 

• France faced an unexpected resignation from its prime minister. 
• In Germany, exports and factory orders fell. 
• The government raised its 2024 growth forecast to 0.2%. 

Asia: 

• In Japan, Sanae Takaichi was elected leader of the ruling party, positioning her to become the country’s first female prime minister. 
• In China, despite the holiday break, the World Bank raised its growth forecast to 4.8%, and the government tightened export controls on rare earth minerals. 

Latin America: 

• In Brazil, beef exports to China rose 38.3% year-over-year in September, setting a new trade record. 
• In Mexico, inflation rose to 3.76% in September. The World Bank revised its 2025 growth forecast upward to 0.5% and anticipates 1.4% for 2026. 

“The four most dangerous words in investing are: ‘This time it’s different.’” — John Templeton 

Key Upcoming Events: 

• China: Export and inflation data — October 12–15 
• United States: Inflation report — October 15 

Monitor

September 29 – October 3

General Summary: Markets faced mixed signals last week, balancing political uncertainty in the U.S., inflationary pressures in Europe, and weakness in Asia. Meanwhile, Latin America showed resilience in public finances and corporate outlooks.

United States

• The government remains shut down, the first in nearly seven years, delaying official labor data. Still, markets closed higher on optimism for a short shutdown and strong tech sector performance.
• ADP reported a reduction of 32,000 jobs in September, the largest decline since March 2023.
• Consumer confidence fell more than expected, while President Trump announced an agreement with Pfizer to voluntarily lower drug prices.

Europe

• UK GDP slowed to 0.3% in Q2 (vs. 0.7% in Q1), in line with expectations.
• German inflation accelerated to 2.4% YoY, the highest since February, while unemployment rose by 14,000 to 2.98M.
• The European Union plans to double steel tariffs to 50%, aligning with the U.S. against Chinese overcapacity.

Asia

• Japan: Industrial production fell 1.2% MoM, while retail sales dropped 1.1%, the first contraction in over three years.
• China: Manufacturing activity contracted for the sixth consecutive month, awaiting new stimulus measures and clearer U.S. trade relations.

Latin America

• Brazil: Public finances exceeded expectations; debt held at 77.5% of GDP, and the primary deficit was ~BRL 17B (~USD 3B), lower than projected.
• Mexico: Fitch plans to raise Pemex’s rating from BB to BB+ after a USD 10B bond buyback, highlighting closer ties with the sovereign. The government emphasized economic resilience and projects 2.3% average growth in 2026.

“In investing, what is comfortable is rarely profitable.” — Robert Arnott

Important Events:

• U.S.: Fed officials’ speeches — October 7–10
• U.S.: Fed minutes — October 8

Monitor

September 22–26

General Summary: In an environment marked by monetary uncertainty and resilient consumption, the latest data and comments from financial authorities show a mixed picture: while the OECD revised global growth forecasts upward, some central banks remain cautious and highlight medium-term risks.

United States

• Fed Governor Stephen Miran stated that interest rates are too high and should be cut by up to 200 bps.
• Jerome Powell warned that equity valuations remain elevated and the path to rate cuts is uncertain.
• Q2 GDP was revised upward to 3.8% annualized, supported by consumer spending.
• OECD projects global growth of 3.2% in 2024 and 1.8% for the U.S. in 2025.

Europe

• UK retail sales rose 0.5% in August.
• Eurozone business activity reached its fastest pace in 16 months, led by Germany’s service sector.
• The Swiss National Bank held rates at 0% and warned about the potential impact of U.S. tariffs through 2026.

Japan

• Manufacturing contracted at the sharpest pace in six months.
• The services producer price index rose 2.7% YoY in August.

China

• Donald Trump advanced plans for U.S. investors to acquire TikTok’s U.S. operations from ByteDance, valued at $14 billion.

Mexico

• Banxico cut the policy rate to 7.5%, the lowest level in three years.
• Inflation in the first half of September stood at 3.74% YoY, in line with expectations.
• OECD revised growth to 0.8% in 2024 (from 0.4%) and to 1.3% in 2026 (from 1.1%).

“The greatest enemy of a good plan is the dream of a perfect plan. Stick to the good plan.” — John C. Bogle

Key Events:

• U.S.: Consumer Confidence — September 30
• U.S.: Employment Report — October 03

Monitor

Week: September 15–19 

Recent economic data and monetary policy decisions highlight diverging dynamics in the global landscape. From the Fed’s first rate cut of the year to slowing momentum in China and persistent inflation in the United Kingdom, markets are navigating a complex environment. 

United States: 

• In the United States, the Federal Reserve delivered its first rate cut of the year, while retail sales surprised to the upside. 

Europe: 

• In the United Kingdom the inflation remained elevated. 
• In Germany  investor´s confidence improved unexpectedly. 

Asia: 

• China showed a slowdown in consumption and industry. 
• Japan recorded a sharp drop in exports to the U.S. 

Latin America: 

• Brazil kept its benchmark rate unchanged. 
• Mexico advanced with USMCA consultations and issued bonds to finance PEMEX. 

“I’ve usually used the phrase stay the course as one of the great rules of investment success.” — John C. Bogle 

Key Upcoming Events 

• In the United States, several Fed members are scheduled to speak — 09/22–24 
• In the United States, the final revision of Q2 2025 GDP will be released — 09/25 

Monitor