Markets Show Cautious Optimism; Mexican Economy Grows Slowly Under Pressure from Tariffs and High Rates

Global financial markets closed the week on a note of optimism,

recording gains on the main stock exchanges in the United States and Europe. Without

However, this sentiment contrasts with the more optimistic economic outlook.

Cautious for Mexico, which faces slow growth, pressures from politics

US trade and high interest rates, while implementation begins

gradual implementation of significant labor reform.

Positive Performance in Global Stock Markets (Closing Friday, May 2)

The main stock exchanges showed a favorable performance at the close of the

Friday session, suggesting a respite from recent volatility:

* United States: The Dow Jones rose +1.39%, the Nasdaq +1.51% and the S&P 500

+1.47%.

* Europe: Broad-based gains were seen, with the German DAX standing out.

(+2.62%) and the French CAC 40 (+2.33%). The Spanish IBEX 35 gained +1.20% and the FTSE 100

British +1.17%.

This rebound in the stock markets may reflect more optimistic investor sentiment.

positive in the short term, although the underlying economic fundamentals present

a more complex picture.

The Mexican economy showed signs of slowdown in the first quarter of

2025 (1Q2025):

* Timely GDP Estimate: Growth of just +0.2% compared to the quarter

previous and +0.6% annually. While this avoids a technical recession (two quarters

consecutive contraction), the analysis of Mexico how are we doing? rates the

situation of "worrying", with 96.7% of GDP (secondary activities and

tertiary) in stagnation.

* Impact of US Trade Policy: Anticipation of the entry into force of

US tariffs boosted industrial production and exports

Mexicans in March, but this same phenomenon contributed to the contraction

quarterly (-0.1%) in the US due to the strong increase in its imports.

Uncertainty persists as most of the tariffs came into effect in the

second quarter (2Q2025).

* 2025 Forecast Downward: The Bank of Mexico (Banxico) and other analysts have

significantly revised downwards the GDP growth forecast for 2025,

now standing at between 0.6% and 1.5% (compared to 2.1%-2.5% previously). The reasons include

Trade uncertainty with the US, high credit costs (Banxico rate

(9.5%) and the possibility of a generalized 25% tariff on exports

Mexicans.

In the midst of this economic outlook, the Mexican government announced the start of the

"gradual and gradual" introduction of the 40-hour workweek. This reform is

significant in a country that, according to the OECD, recorded 2,207 hours worked per

employed by 2023, one of the highest figures in the world. The stated goal is

return 8 hours a week to workers for their well-being and development

national. This measure adds to previous efforts to regain power

purchasing power of the minimum wage, which according to the government has increased by 134% since

2018. The implementation of this reform will have important implications for the

productivity, business costs and the quality of life of workers.

The influence of trade policies and tariffs becomes tangible in the

consumer prices. Microsoft announced this week a significant increase in

the prices of its Xbox Series S/X consoles and accessories worldwide, and plans

raise the price of its new first-party games to $80 USD starting at the end of the year.

Although Microsoft cites "market conditions and the rising cost of development,"

This movement occurs in a context where tariffs imposed by the

Trump administration particularly affects electronics imported from China,

impacting the entire industry (Sony and Nintendo have also adjusted prices).

Apple, for example, estimates it will pay $900 million in tariffs this quarter alone.

(Quote Block: «With this measure [40-hour week] we will be giving them back

eight hours a week to use as best suits them…

will contribute to national development, the well-being of their families and the happiness of each

one of you." – Marath Bolaños, Secretary of Labor)

In short, the global and Mexican economies are navigating complex waters. While

financial markets show some resilience, macroeconomic data and

Political decisions (labor reforms, trade policies) point to a

adjustment period and significant challenges in 2025.