A complicated month and quarter ends for the markets. Although economic data from our northern neighbor have shown resilience and a growing economy, this has had a different impact on financial markets, which have had to accept that the period of high interest rates will have to be longer in order to achieve the Federal Reserve's inflation targets.

In addition to the above, the nervousness seen in the markets during the month of September was also fueled by the complicated negotiations between Republicans and Democrats to avoid a possible U.S. government shutdown, the strikes of workers in the major automakers demanding higher wages, as well as higher oil prices that have reached levels of 90dpb from 68dpb at the end of May; the last two points affecting the downward path of inflation.

Thus, during September, the main stock indexes, S&P500 and Nasdaq, fell -4.87% and -5.81%, respectively. Likewise, the Mexican stock market also suffered an adjustment of -4.05% during the month. At the sector level, the energy sector was the big winner of the quarter, benefiting from the aforementioned rise in oil prices, while the technology sector was unable to maintain the dynamism shown during the first half of the year in relation to artificial intelligence. Similarly, the industrial and materials sectors were affected by weak manufacturing activity, which contrasts with a resilient consumer. Meanwhile, debt markets also suffered widespread declines as a result of a ~60bp increase in the U.S. government 10-year bond rate during the month, with the aggregate bond and investment grade corporate bond indices being the most affected during the month (-2.54% and -2.67%, respectively).

Finally, in Mexico, the Economic Policy Criteria for 2024 were presented, in which, since it is an election year, the key to programmable spending is opened, prioritizing current spending for the administration's clientelist programs over investment. Likewise, a primary deficit of 1.2% and around 5% for the total financial requirements of the public sector is foreseen, which will represent a burden for the next administration.