During the month of October, the main S&P 500, Dow Jones and Nasdaq stock indexes accumulated negative returns of -0.99%, -1.34% and -0.52%, respectively. Despite a good reporting season, in which companies such as Google, Meta and Amazon continued to outperform expectations, as well as earnings growth of 5.3% for the rest of the S&P 500 companies during the quarter and estimates of 9.4% for the full year 2024, the U.S. electoral process and the consequences it could bring to the markets put investors in a cautious mode leading them to take profits.

Similarly, the main fixed income indices suffered widespread declines with the aggregate bond index being the hardest hit with a -2.48% drop during the month. The U.S. yield curve shifted upward causing prices to fall across all maturities. As an example, the 5, 10 and 30-year maturities ended the month at levels of 4.15% (+57bp), 4.28% (+47bp) and 4.47% (+33bp), respectively.

For the local market, the results were not favorable during the period either. The Mexican stock market fell 3.46% during October alone to accumulate a drop in pesos of 11.72% so far this year; if we add to this the 18.06% depreciation of the peso against the dollar, our IPC accumulates -25.46% so far this year, making it one of the worst investments in dollars during the period.

Finally, following the November 5 elections in the United States in which the Republican party had a landslide victory winning the presidency, the senate and most likely the house of representatives, going forward, at Grupo Inversion we think Donald Trump's agenda is clear in promoting lower taxes, less regulation, a stricter immigration policy and general tariffs on imports. This would indicate a boost to growth in the short term, with stocks and the US dollar continuing their positive trend of the year, however, such policies would raise the deficit and inflation in the medium term limiting future rate cuts by the Federal Reserve.