• The American economy expanded at a healthy 2.8% annual pace from July through September on strong consumer spending and a surge in exports, the government said Wednesday, November 27, 2024, leaving unchanged its initial estimate of third-quarter growth. Consumer spending, at 3.5%, was revised down from the previously estimated 3.7% rate, but up from 2.8% in the April-June period and the fastest growth since the fourth quarter of 2023.
• Furthermore, slight downward revisions to consumer spending, government outlays and exports, were offset by upgrades to private inventory accumulation, and business investment as well as state and local government spending
• The Commerce Department reported that growth in US gross domestic product, the economy’s output of goods and services, slowed from the April-July rate of 3%. However, the GDP report still showed that the US economy is proving surprisingly durable. Notably, growth has topped 2% for eight of the last nine quarters.
• Despite the resilience, the US economy is expanding at a pace that is well above what Federal Reserve officials regard as the non-inflationary growth rate of around 1.8%. Nonetheless, most Wall Street traders expect the Fed to cut rates again in December, with growth remaining steady, unemployment at a low of 4.1%, and inflation (12-month CPI), which hit a four-decade high of 9.1% in June 2022, having fallen to 2.6%.

(Sources: CNBC & Reuters)

• Inflation edged higher in October as the Federal Reserve is looking for clues on how much it should lower interest rates, the Commerce Department reported.
• The personal consumption expenditures price index, a broad measure the Federal Reserve prefers as its inflation gauge, increased 0.2% in October and showed a 12-month inflation rate of 2.3%. Both were in line with the Dow Jones consensus forecast, though the annual rate was higher than the 2.1% level in September.
• Excluding food and energy, core inflation showed even stronger readings, with an increase of 0.3% on a monthly basis and an annual reading of 2.8%. Both also met expectations. The annual rate, however, was 0.1 percentage points above the prior month.
• Fed policymakers target inflation at a 2% annual rate. PCE inflation has been above that level since March 2021 and peaked around 7.2% in June 2022, prompting the Fed to go on an aggressive rate-hiking campaign.
• While the inflation rate has dropped significantly since the Fed started tightening, it remains a nettlesome problem for households and figured prominently in the presidential race.
• According to traders December remains in play, but further rate cuts in 2025 are fading as policy gets closer to neutral. “Today’s data shouldn’t change views of the likely path for disinflation, however bumpy. But a lot of observers, probably including some at the Fed, are looking for reasons to get more hawkish on the outlook given the potential for inflationary policy change like new tariffs.”

(Sources: CNBC & Reuters)

• Tropical Battery Company Limited (TROPICAL) announced that on September 19, 2024, it acquired a property for $950Mn in Ferry Pen, Kingston 20.

• The property was acquired from Diverze Properties, an associated company under the DAI Diverze (Jamaica) Limited group.

• This acquisition supports Tropical Battery's growth strategy, enhancing its operational capabilities, reducing related-party loans, and is expected to have a positive impact on its financial performance.

• Since the beginning of the year, the company has been making headlines with several key partnerships, including becoming the authorized reseller for eGauge Systems, a provider of commercial, industrial, residential and renewable energy monitoring solutions based in US, and the official dealer for electric car manufacturing giant, Tesla.

• In addition, the company acquired Silicon Valley, California-based Rose Electronics for almost US$20Mn earlier this year, which contributed 55% and 65% to its Q3 revenues and operating profit, respectively. The acquisition was completed through Tropical’s US subsidiary - Tropical Battery USA LLC. This acquisition reaffirmed its commitment to transforming Tropical Battery into a multinational organization at the vanguard of innovative growth in emerging segments driving the transition to more sustainable energy solutions.

• Tropical Battery’s stock price has increased by 28.2% since the start of the calendar year fueled by strong year-to-date earnings growth and promising growth opportunities driven by recent strategic developments. The stock closed Wednesday’s trading session at $2.50 implying a P/E of 15.8x last 12 months’ earnings, which is above the Junior Market Distribution Sector Average of 20.0x.

(Sources: JSE & NCBCM Research)

• Minister of Tourism, Hon. Edmund Bartlett, says Jamaica stands ready to take on the role of a key supply logistics hub for the Caribbean cruise industry, creating a huge and transformative opportunity for local producers.

• Mr. Bartlett added that several major cruise lines, including the world’s two biggest cruise companies, Carnival and Royal Caribbean, have expressed an eagerness to source more of their onboard product needs from the island, marking a significant development for Jamaica’s economy. “

• Minister Bartlett, whose team recently held talks with a distinguished delegation from Carnival Cruise Lines, including senior executive and Jamaica-born Marie McKenzie, in Kingston, highlighted that the interest from these leading cruise lines is a testament to the growing recognition of Jamaica’s ability to deliver top-tier goods and services.

• However, he pointed out that meeting the rigorous standards set by international cruise operators will require substantial improvements in product sophistication, quality control, and supply chain efficiency. He emphasized that it is precisely for this reason that the Tourism Linkages Network and Jamaica Vacations (JAMVAC) have been working tirelessly to equip local businesses to meet this rising demand.

• He also pointed to the potential of integrating local artisans into the cruise supply chain, which would not only promote Jamaican culture but also enhance the tourism experience. Craft products, art, and traditional goods could gain exposure on cruise ships, allowing artisans to showcase their talents internationally.

• Ultimately, enhancing local supply chains is crucial for making Jamaica’s tourism sector more resilient and self-sufficient, as it will help to drive long-term economic recovery and growth through partnerships with global cruise lines.

(Source: JIS)

• Growth in gross domestic product (GDP) for Mexico was revised slightly higher for  its September quarter (Q3 2024), largely owing to stronger services activity, statistic agency INEGI  said on Friday.

• The economy grew at an annualized 1.6% rate in Q3, up from 1.5% growth in the first estimate reported 30 October. Still, growth in Q3 marked an easing from 2.2% annual growth recorded in Q2 2024.

• Comprising 60% of the economy, services sector growth was revised to an annualized 2.1% in the final estimate, from 1.9% in the preliminary estimate. The rebound in services in Q3, up from 1.5% in the June quarter, might be due to the delayed effects of increased public spending from the Mexican electoral process and completed works from the previous administration, Citibanamex said.

• While the industrial component, comprising 32% of GDP, experienced annualized growth of 0.4%, that was revised down from the previously estimated 0.5% growth. Nevertheless, the revised growth rate is slightly higher than the 0.3% growth observed in the second quarter.

• Additionally, Mexico's central bank, known as Banxico, lowered its key rate by 25 basis points to 10.25% last week in a unanimous decision, underscoring progress on bringing down core inflation, and signaled future rate cuts were possible.

(Source: Argus Media & Reuters)

• The Bahamas has unlocked more than US$120Mn to fund the conservation and management of its oceans and mangroves through a debt swap financed by Standard Chartered and backed by the private sector.

• Debt-for-nature swaps are emerging as crucial tools to help countries achieve conservation and climate goals, addressing the US$942Bn global nature finance gap estimated by BloombergNEF.

• By spending US$215.7Mn to buy back Eurobonds and repurchasing an US$81Mn commercial bank loan using a 4.7% US$300Mn 15- year loan from Standard Chartered, the Bahamas can redeploy interest and principal payment savings into extensive ocean conservation projects.

• The swap comes after nations at a UN biodiversity summit in Colombia in October failed to devise a plan for how countries would reach the ambitious global goals for mobilizing billions of dollars for nature conservation. 

• Funding from the Bahamas swap will go towards restoring mangroves damaged by the hurricane, managing the archipelago's 6.8Mn hectares of marine protected areas and supporting the build out of a new project to protect the entire Bahamian ocean area.

• The Bahamas’ debt swap sets a precedent for leveraging private sector involvement in conservation financing, addressing significant environmental challenges, while promoting sustainable economic development.

(Sources: Reuters & ESG News)

• OPEC+ nations are discussing a further delay to a planned oil output hike that was due to start in January, two sources from the producer group said, ahead of Sunday's meeting to decide policy for the early months of 2025.

• The two OPEC+ sources were speaking after OPEC+ members Iraq, Saudi Arabia and Russia held talks in Baghdad, Iraq, on Tuesday, November 26, 2024. OPEC+ comprises the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia.

• OPEC+, which pumps about half the world's oil, had planned to gradually roll back oil production cuts with small increases over many months in 2024 and 2025. However, a slowdown in Chinese and global demand, and rising output outside the group, have put a dampener on that plan.

• Notably, at its most recent meeting on November 3, 2024, OPEC+ agreed to delay a planned December output increase by a month until the end of December. The hike is due to be 180,000 barrels per day (bpd), a small part of the total 5.86 million bpd of output OPEC+ is holding back, equal to about 5.7% of global demand. OPEC+ agreed to those cuts in separate steps in 2022 to support the market.

• However, last week, OPEC+ sources said the output hike could be delayed until the first quarter. Analysts at Commerzbank expect it could be postponed until at least the end of the first quarter.

• Despite OPEC+'s cuts and delays to output hikes, oil prices have mostly stayed in a $70-$80 per barrel range this year and on Tuesday (November 26, 2024) were trading below $74 a barrel, not far above a 2024 low reached in September.

(Source: Reuters) 

• Federal Reserve officials expressed confidence that inflation is easing and the labour market is strong, allowing for further interest rate cuts albeit at a gradual pace, according to minutes from the November meeting released on November 26, 2024.

• The meeting summary contained multiple statements indicating that officials are comfortable with the pace of inflation, even though by most measures it remains above the Fed’s 2% goal.

• With that in mind, and with conviction that the jobs picture is still fairly solid, Federal Open Market Committee members indicated that further rate cuts likely will happen, though they did not specify when and to what degree.

• “In discussing the outlook for monetary policy, participants anticipated that if the data came in about as expected, with inflation continuing to move down sustainably to 2 per cent and the economy remaining near maximum employment, it would likely be appropriate to move gradually toward a more neutral stance of policy over time,” the minutes said.

• The FOMC voted unanimously at the meeting to take down its benchmark borrowing rate by a quarter percentage point to a target range of 4.5%-4.75%. Markets expect the Fed could cut again in December, though conviction has waned among concerns that President-elect Donald Trump’s plans for tariffs could stoke inflation higher.

• That said, there was no mention of the election in the minutes, save for a staff notation that stock market volatility rose before the November 5th election results and fell after. There also was no discussion of the implications of fiscal policy, despite anticipation that Trump’s plans, which also include lower taxes and aggressive deregulation, could have substantial economic impacts.

(Source: CNBC) 

• Wigton Energy has announced its success in the Generation Procurement Entity's (GPE) 100MW renewable energy tender. Following a rigorous selection process, Wigton Energy emerged as one of two entities awarded in the tender process.
• Wigton Energy will be installing a 49.83MW solar energy facility in Clarendon. Once completed, it will become the largest solar installation in Jamaica. With this award, Wigton reinforces its leadership in diversifying Jamaica's energy mix and expanding beyond its established portfolio in wind energy.
• CEO of Wigton Energy, Gary Barrow stated: "This project is a testament to the impact of the strategic shift Wigton Energy has undertaken to diversify into multiple forms of renewable energy and not just wind."
• As Jamaica seeks to increase its reliance on renewable energy, Wigton Energy is at the forefront of this critical shift. The new solar facility in Clarendon will supply clean, sustainable power and play a pivotal role in enhancing the country’s energy independence while advancing its environmental goals.
• In recent months, the company made significant structural changes to align with its new strategic direction. Coming out of these structural changes, Wigton Energy will focus on five key strategic pillars to drive sustained and profitable growth, which includes; being brilliant at the basics, growth through diversification, agile work culture, brand repositioning, and strategic partnerships, with an emphasis on diversification.
• As Wigton Energy actively expands into other renewable energy solutions, it is simultaneously working on enhancing operational efficiency and exploring both independent and partnership investment opportunities. This strategic shift is essential for sustaining shareholder value and ensuring long-term growth by branching into new sectors and expanding its capabilities to boost earnings.

(Sources: JSE & NCBCM Research)

• The Government of Jamaica (GOJ) has designed an economic diversification plan to harness Jamaica’s unique comparative advantages and position the nation for sustainable growth in the global economy.
• Prime Minister, Dr. the Most Hon. Andrew Holness, outlined the comprehensive strategy, which aims to diversify Jamaica’s economic base and foster the development of new industries, during the launch of ASPIRE Jamaica, at the Office of the Prime Minister on November 19.
• ASPIRE Jamaica, the GOJ’s new policy framework for inclusive growth, outlines six critical pillars for transforming Jamaica into a modern, peaceful, productive and prosperous society. These are Access to Economic Opportunity for All (Inclusive Growth); Safety and Security; People (Human Capital Development); Infrastructure Development; Reform of the Bureaucracy (Ease, Speed, and Cost of Doing Business); and Economic Diversification/New Industries.
• Expounding on the economic diversification plan, the Prime Minister emphasized, “We must prioritise sectors that will drive future growth. There are numerous opportunities that have been discussed for years, but have yet to be fully realized on a significant scale.”
• Key areas for development include Tourism Linkages, aimed at strengthening the connection between agriculture and tourism. Initiatives like the Agri-Linkages Exchange Platform (ALEX) to reduce imports and increase local production will be key. Another priority is Logistics Hub Development, leveraging Jamaica's strategic location amid global trends toward nearshoring and friendshoring.
• Medical Tourism and Wellness will also be a focus, with the aging North American population presenting an opportunity for Jamaica to offer affordable, high-quality medical services alongside wellness tourism.
• The PM also highlighted the Digital Society Transition, with a vision to make Jamaica the Silicon Valley of the region. This includes initiatives like the National Identification System and expanding internet connectivity across communities. Prime Minister Holness also unveiled plans to accelerate the long-awaited Caymanas Special Economic Zone project, with infrastructure development set to begin by March 2025.

(Source: JIS)