Uriel Loredo

Week of May 19–23 

This week, markets were focused on the evolving fiscal debate and long-term interest rates. 

KEY HIGHLIGHTS BY REGION 

This week, Moody’s downgraded the U.S. sovereign credit rating from ‘Aaa’ to ‘Aa1’, citing the growing fiscal deficit and high refinancing costs. Meanwhile, the fiscal debate is intensifying, and the Fed remains cautious. Here are the main developments by region: 

• United States: Moody’s cut the U.S. credit rating. The House passed Trump’s fiscal plan, which includes tax cuts and increased defense spending. The Fed signaled no rate cuts before September. Yields on 10- and 30-year Treasuries rose. Toward the end of the week, President Trump proposed a 50% tariff on the European Union and a 25% tariff on Apple. 

• Europe: U.K. inflation came in above expectations, reaching 3.5%. In Germany, the Ifo Business Climate Index rose more than forecast, signaling greater corporate confidence. 

• China: Retail sales rose 5.1% year-over-year in April, missing expectations. The central bank cut its key lending rates for the first time since October. 

• Brazil: Economic activity grew 0.8% in March, twice the expected pace. On a yearly basis, growth reached 3.49%. 

• Mexico: Inflation in the first half of May accelerated to 4.22%. First-quarter GDP remained unchanged from the initial estimate. Additionally, a 15% average tariff is anticipated on vehicles exported to the U.S. 

Fiscal and trade uncertainty continues to shape the outlook. While many recent developments were partially priced in, upcoming shifts in interest rates, inflation, and growth will remain key drivers for markets in the months ahead. 

KEY DATES TO WATCH 

• May 26 (U.S.): Markets closed for Memorial Day 
• May 28 (U.S.): Release of the Fed’s latest meeting minutes 

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Week of May 12–16 

This week, global economic activity delivered mixed signals. 

INTERNATIONAL OVERVIEW: MIXED SIGNALS FROM THE MARKETS 

Recent economic data reveal meaningful shifts in inflation, interest rates, and global activity. Here are the most relevant highlights by country: 

• United States: A temporary tariff reduction was agreed upon with China. Inflation rose 0.2% in April, with an annual rate of 2.3%, coming in below expectations. Fed Chair Jerome Powell warned that interest rates may need to remain higher for longer due to supply chain pressures. 

• Europe: Germany reported annual inflation of 2.2% in April, as expected. The U.K. economy surprised with 0.7% GDP growth in Q1, driven by strong business investment. 

• China: Inflation turned negative again (-0.1% year-over-year), while producer prices dropped 2.7%. Analysts highlight the need for stronger fiscal stimulus to boost domestic consumption. 

• Brazil: Around 30 agreements were signed with China across strategic sectors such as infrastructure, mining, artificial intelligence, and environmental initiatives. 

• Mexico: The Bank of Mexico cut its benchmark rate to 8.5% for the third straight time and signaled the possibility of further easing. Consumer confidence continued to weaken. 

A long-term investor stays focused on strategies aligned with their risk tolerance to meet financial goals over time. 

KEY UPCOMING EVENTS 

• China: Retail sales and industrial production data – May 19 
• United States: Fed officials scheduled to speak – May 19–20 

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Week of May 5–9 

Here’s a summary of the most relevant events that shaped the markets this week: 

The Federal Reserve kept its benchmark interest rate unchanged at 4.25%–4.5%, as expected. However, the message was clear: uncertainty is rising. Jerome Powell warned that tariffs could lead to higher long-term inflation and slower economic growth. Meanwhile, President Trump announced a new trade deal with the U.K., though it does not currently include removing tariffs on China. 

Key international developments: 

• Europe: Germany reported strong trade and industrial data for March. The Bank of England cut its interest rate to 4.25%.
   
• China: New monetary stimulus measures were introduced, including a rate cut and a reduction in the bank reserve requirement ratio. 
  
• Brazil: The Central Bank raised its benchmark rate to 14.75%—the highest level in two decades—and signaled that further hikes are possible. 
  
• Mexico: April inflation came in at 3.93% year-over-year. Markets continue to expect another rate cut from Banxico, while growth forecasts are being revised downward. 

“Uncertainty actually is the friend of the buyer of long-term values” — Warren Buffett 

KEY UPCOMING EVENTS 

• U.S. Inflation Report – May 13 
• U.S. Retail Sales – May 15 

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U.S. employment, inflation in Europe, and export rebounds in Mexico and China. 

Week of April 28 to May 2 

Market Highlights 
Here’s a summary of the most relevant developments that influenced global markets this week: 

• United States 
177,000 jobs were created in April, beating the 138,000 forecast. However, consumer confidence fell to its lowest level in five years, and Q1 2025 GDP contracted by 0.3%. 
Job openings (JOLTS) also dropped to a six-month low. 

• Europe 
Eurozone GDP grew 0.4% in the first quarter, exceeding projections. However, consumer inflation expectations rose to 2.9% over the next 12 months. 

• China 
The government reaffirmed its commitment to boosting growth through proactive fiscal measures. However, manufacturing activity declined again, reaching a two-year low. 

• Brazil 
The Central Bank emphasized a comprehensive approach amid early signs of economic cooling and inflation levels still above target. There’s growing optimism around the ratification of the Mercosur-EU agreement. 

• Mexico 
Preliminary Q1 2025 GDP grew 0.2%, avoiding a technical recession. Exports rose 9.6% year-over-year, and the trade surplus reached US$3.443 billion. Still, inflation edged up slightly to 3.96%. 

In investing, adaptability in times of change isn’t just an advantage—it’s essential for uncovering new opportunities. 

Key Upcoming Events 

• In the U.S., the ISM Services Index will be released – 05/05 
• In the U.S., the Fed will announce monetary policy – 05/07 

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Strong U.S. sales and growth in China stand in contrast with ongoing trade tensions. 

Week of April 21–25 

Market Highlights 
Here’s a summary of the most relevant developments that influenced global markets this week: 

United States 

• Treasury Secretary Scott Bessent suggested that trade tensions with China could ease in the coming months, though a unilateral removal of tariffs is not under consideration. 
• The IMF revised its U.S. growth forecast downward to 1.8% for 2025, from a previous estimate of 2.7%. 
• Gold prices surpassed $3,500 per ounce for the first time in history. 

Europe 

• Economic activity in both the eurozone and the U.K. stagnated, impacted by trade-related uncertainty. 
• Nevertheless, Germany’s Ifo Business Climate Index posted an unexpected increase in April, reflecting improved sentiment. 

China 

• For the sixth consecutive month, interest rates were left unchanged: the one-year LPR remains at 3.1%, and the five-year LPR at 3.6%. 
• The Chinese government ruled out resuming trade negotiations with the U.S. while tariffs remain in place. 

Brazil 

• The Finance Minister dismissed the likelihood of a recession, expressing confidence that global tariffs will not be sustained and emphasizing that inflation is approaching the Central Bank’s target. 

Mexico 

• Citi revised its 2025 growth forecast downward to 0.2% (from 0.3%) and now anticipates the benchmark interest rate to end the year at 7.75%. 
• Inflation in the first half of April rose to 3.96%, driven primarily by price increases in fruits and vegetables. 

In investing, adaptability in times of change isn’t just an advantage—it’s essential for uncovering new opportunities. 

 Key Upcoming Events 

• May 1: ISM Manufacturing Index (U.S.) 
• May 2: Employment indicators (U.S.) 

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Week of April 14–17 

Here’s a quick look at the most relevant developments that shaped markets during this shortened week. 

United States 

• President Trump is considering temporary exemptions from the 25% tariffs on vehicles and auto parts. 
• Electronic devices like smartphones and computers have been temporarily exempted. 
• Retail sales rose 1.4% in March, beating expectations. 
• Fed Governor Waller noted that the inflationary impact of tariffs would likely be “transitory.” 

Europe 

• U.K. inflation fell to 2.6% in March, better than expected. 
• EU leaders believe most tariffs imposed on the bloc will remain in place. 
• The U.S. may temporarily ease some tariffs, but full removal isn’t expected. 

China 

• Exports rose 12.4% year-over-year in March, surpassing the 4.4% forecast. 
• First-quarter GDP grew 5.4% annually, despite ongoing trade tensions with the U.S. 

Brazil 

• Analysts expect economic growth to slow in the second half of the year, weighed down by high domestic interest rates and global trade friction. 

Mexico 

• The U.S. will impose a 20.91% tariff on Mexican tomato imports starting in July. 
• Finance executives warn that Mexico could lose its investment-grade rating by 2026 if trade relations with the U.S. deteriorate and fiscal deficits persist. 

Staying informed is key to understanding the ever-changing environment in which investments operate.

IMPORTANT EVENTS – CALENDAR 

• April 23: The Federal Reserve’s Beige Book economic report will be released. 
• April 22–24: Regional manufacturing reports will be published in the U.S. 

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