Morning View

In the United States, negotiations are progressing to resolve the partial shutdown of the federal government

International

This week in the United States, attention will be focused on possible progress in negotiations to end the partial shutdown of the federal government. The Senate approved a key vote enabling debate on the temporary funding bill, reflecting a rapprochement between Democrats and Republicans after more than forty days of disruption to federal activities.

Another important piece of data this week will be October inflation, which will be released on Thursday and is expected to be +0.2% monthly and +3.1% year-on-year, while the core measurement, which excludes food and energy, is expected to be +0.3% monthly and +3% year-on-year.

The major U.S. stock indexes closed with mixed results on Friday. The S&P 500 advanced +0.1%, while the Nasdaq fell -0.2% and the Dow Jones gained +0.2%. So far this year, the indexes have accumulated gains of +14.4%, +19.1% and +10.4%, respectively.

Meanwhile, the US Treasury bond yield curve remained virtually unchanged. The 1-year bond closed with a yield of 3.62%, down from 3.64% previously, while the 3-year bond closed unchanged at 3.56%, and the 10-year bond yield rose to 4.09% from 4.08% previously.

Regarding the third-quarter earnings season, 91% of S&P 500 companies have already released their earnings reports. Of these, 82% reported positive earnings surprises, a percentage higher than the average for the last five years (78%) and ten years (75%). Overall, earnings are 7% above expectations, in line with the average for the last decade. The sectors that have surprised the most on the upside are Financials, Information Technology, and Consumer Discretionary. If this trend continues, earnings growth would be 13.1% year-on-year for the quarter, compared to the 7.9% projected as of September 30.

Sources: PUENTE Hnos, Bloomberg

The Bank of England keeps its benchmark interest rate at 4%

International

Yesterday, the Bank of England held its monetary policy meeting. The Committee voted 5 to 4 in favor of keeping the interest rate at 4%, while the four dissenting votes were in favor of cutting the rate by 25 basis points. The statement highlights that the risk of high inflation persisting has become less pronounced and that, if disinflation continues, the path of rate cuts will also continue.

The main U.S. stock indexes fell yesterday. The S&P 500 lost 1.1%, while the Nasdaq fell 1.9% and the Dow Jones 0.8%. So far this year, the indexes have accumulated gains of 14.3%, 19.4%, and 10.3%, respectively.

At the same time, the US Treasury bond yield curve flattened. The 1-year bond closed with a yield of 3.64%, down from 3.70% previously, while the 3-year bond closed at 3.56%, down from 3.65% previously, and the 10-year bond yield fell to 4.08% from 4.16% on Wednesday.

Finally, both Chile and Mexico released their November inflation data. In Chile, inflation stood at +3.4% year-on-year, below the +3.7% projected by the consensus of analysts, while in Mexico the figure was +3.6% year-on-year, in line with projections.

Sources: PUENTE Hnos, Bloomberg