Mexican Stock Market Hits New All-Time Highs Following U.S. Jobs Data

Background on the Mexican Stock Market and Fed Interest Rates

The Mexican stock market has been experiencing gains for the second consecutive day, with key indices reaching new all-time highs following a U.S. employment report that supports expectations of interest rate cuts by the Federal Reserve.

Key Players and Their Impact

The S&P/BMV IPC, managed by the Bolsa Mexicana de Valores (BMV), which includes the most traded local stocks, rose by 0.65% to 60,256.11 units. The FTSE BIVA, operated by the Bolsa Institucional de Valores (Biva), also increased by 0.65% to 1,206.51 points.

Image source

Among the reference index constituents, most stocks are trading upwards. Notable gainers include Kimberly-Clark with a 2.42% increase to 37.29 pesos, Grupo Financiero Banorte with a 1.98% rise to 175.86 pesos, and BanBajío with a 1.45% gain to 48.27.

U.S. Jobs Report and Fed Expectations

The U.S. non-farm payrolls report for August showed a mere increase of 22,000 jobs, falling significantly short of the market’s expectation of 75,000 new positions. The unemployment rate rose to 4.3% from July’s 4.2%, indicating weakness in the job market.

According to Fed Watch, a tool that monitors the futures of the federal funds rate, traders anticipate a 50 basis point cut with a 14.20% probability this month, although the majority (85.8%) expect a 25 basis point reduction next month, with a 70% likelihood of another cut in the following month.

Key Questions and Answers

• What is the Mexican stock market’s current status? The Mexican stock market has been experiencing gains for two consecutive days, with key indices reaching new all-time highs.
• Which U.S. jobs report influenced the Mexican stock market? The non-farm payrolls report for August, which showed a weak job market with only 22,000 new jobs added.
• What are traders expecting from the Federal Reserve regarding interest rate cuts? Traders anticipate either a 25 basis point or a 50 basis point cut, with the majority expecting the smaller reduction this month and another one next month.