The Turim Monthly Economic Report highlights the global dynamics at the beginning of 2024, revealing a strong job market in the United States, escalating geopolitical tensions, and volatility in global interest rates.

The Non-Farm Payroll surprised the market with a net creation of 353 thousand jobs in January, well beyond estimates. Additionally, there was an acceleration in hourly wages, driven by weather-related factors that impacted actual hours worked.

On the global front, geopolitical tensions, especially in the Red Sea region, affected supply chains, resulting in increased freight costs. Regarding the U.S. presidential election, former President Donald Trump confirms strength in the Republican primaries, making the most likely outcome a contest between Trump and the current President Joe Biden, representing the Democratic Party.

In Brazil, the January IPCA (National Broad Consumer Price Index) exceeded expectations, revealing continued high pressure on underlying service prices. On the other hand, there is also an improvement in the external accounts, driven by the strength of net exports in the trade balance.

In the markets, the beginning of the year was marked by volatility in interest rates due to uncertainty about global monetary policy, especially in the U.S. The market, which had been assigning a high probability of cuts already in the March meeting, faced a sequence of “discouraging” events for the thesis, postponing expectations for the start of the cutting cycle.

Some of the major U.S. stock indices, such as the S&P 500 and the Nasdaq Composite, ended January in positive territory despite interest rate volatility. However, the returns of these indices are largely attributed to a few names. That said, the Ibovespa started the year with a weaker performance.