MEXICO: GS Believe QIR Analytical Studies Dovish for Future Banxico Decisions

The Dallas Fed's Texas Service Sector Outlook Survey showed regional services firms' pessimism continued to deepen in April, echoing other regional Fed surveys for the month.

• The general business activity index fell to -19.4 ( -11.3 prior), an 18-month low. 6-month expectations fell to -16.0 (-1.1 prior), a 34-month low.
• As with the Texas manufacturing survey counterpart, the main measure of current activity actually ticked higher (revenue index up 3 points to 3.8, "indicating a small increase in revenue"), however employment weakened and, as noted, forward-looking indicators were very weak.
• Per the report, "the future revenue index dropped 14 points to 16.8, the lowest reading since mid-2020. Other future service sector activity indexes such as employment and capital expenditures also fell but remained in positive territory, reflecting expectations for slower growth in the next six months."
• The inflation readings also ticked higher: current prices paid rose to 32.5 (14-month high) from 27.0, with prices received ticking up to a more modest 4-month high 8.4 from 5.2.
• Anecdotes were broadly negative, mainly citing tariffs - and as we reported previously in our overview of the Manufacturing survey, special questions (which covered the manufacturing, services and retail survey respondents) pointed to significant concerns over tariff implications.
• As a side note, the Texas Retail Outlook Survey - a component of the broader Services survey - showed retail sales activity improved in April, corroborating some signs elsewhere that retail activity to start the quarter (ie Johnson Redbook index) was solid despite sharply weaker sentiment.

• Stocks are holding firmer, top end of mostly narrow ranges ahead midday, DJIA outperforming SPX eminis and Nasdaq indexes. Currently, the DJIA trades up 294.25 points (0.73%) at 40522.85, S&P E-Minis up 21.5 points (0.39%) at 5574.25, Nasdaq up 43.1 points (0.2%) at 17409.22.
• Materials and Health Care sectors outperformed in the first half, chemical makers buoyed the former with Sherwin-Williams +5.04%, Ecolab +2.01%, Mosaic +1.83%, Albemarle +1.69% and International Flavors & Fragrances +1.07%.
• Pharmaceutical makers buoyed the Health Care sectors: Pfizer +3.51% after announcing cost cutting measures as quarterly revenues decline, Merck & Co +2.19%, Amgen +1.45%, Danaher +1.30% and Viatris +1.27%.
• Conversely, Energy and Consumer Discretionary sectors underperformed in the first half, oil & gas stocks weaker with crude lower (WTI -1.37 at 60.68): APA -1.87%, Texas Pacific Land -1.14%, Targa Resources -1.07%, ConocoPhillips -0.97% and Devon -0.82%
• Meanwhile, travel & resort related stocks retreated: Caesars Entertainment -3.24%, MGM Resorts Int -2.20% and Carnival -1.94%.
• Latest earnings expected after the close: Booking Holdings, Mondelez International, Caesars Entertainment, Seagate, Starbucks, Frontier Communications, Expand Energy, Fair Isaac, Visa, BXP, PPG, Edison Int, ONEOK, First Solar, CoStar Group and Snap Inc.

• US TSY TO SELL $85.000 BLN 4W BILL MAY 01, SETTLE MAY 06