In May 2026, domestic light vehicle sales reached 127,100 units, representing annual growth of 4.9% compared to May 2025. In the January-to-May cumulative period, 627,609 vehicles were sold, also 4.9% more than in the same period the prior year. With this, sales maintain a positive trajectory and are above the levels observed in recent years.

Our Take

Vehicle sales continue to show resilience, suggesting that consumption of durable goods maintains favorable performance despite the economic deceleration environment. Although the pace of growth is moderate, the sustained advance in the automotive market points to domestic demand still finding some support from employment and household income. However, going forward, sector performance could be limited by lower economic activity.

According to ADP, US companies created the largest number of jobs since January 2025, with an increase of 122,000 jobs in the private sector. Education and healthcare services sectors led growth with an increase of 57,000 positions. The labor market could be gaining momentum despite higher energy costs caused by the Iran war, as hiring is broadening and the labor market shows sustained dynamism.

Our Take

The figures support the view that the labor market could be recovering after several months of irregular hiring, as job openings increase and layoffs remain low. If official government data confirm this trend, it would increase bets that the Federal Reserve could raise interest rates at some point over the coming months.

Clashes between the US and Iran intensified again in recent hours, with Kuwait and Bahrain caught in the crossfire of one of the most serious episodes since the truce entered into force at the beginning of April. Events follow several days of growing tension, including that generated by Israeli operations against Hezbollah militants, which threatens the US-Iran talks aimed at reaching a provisional peace agreement. This comes as President Trump assured in an interview that Iran has agreed not to possess nuclear weapons.

Our Take

Both parties have agreed to a general framework for extending the truce by two months and reopening the Strait of Hormuz, though negotiations on final details continue to be delayed. Broader negotiations, which will begin once a short-term deal is reached, will be complex and center on Washington's demand that Iran suspend uranium processing for approximately 15 years.

Eurozone producer prices increased 0.6% monthly in April 2026, moderating after the sharp 3.4% increase recorded in March. On an annual basis, the index advanced 4.9%, remaining at elevated levels. By component, monthly increases stood out in intermediate goods (1.8%) and capital goods (0.3%), while energy prices fell -0.4%. Excluding energy, industrial prices grew 0.9% monthly and 2.3% annually.

Our Take

Although the moderation in energy prices helped contain the index's overall advance, the increase in prices excluding energy and the sharp rise in intermediate goods suggest that cost pressures continue to spread throughout production chains. This indicates that inflationary risks remain present in the Eurozone, particularly in a context of geopolitical tensions and higher production costs, which could delay a sustained convergence of inflation toward the ECB's target.

The US government has proposed tariffs of at least 10% on 60 trading partners, including Mexico and Canada, following an investigation into alleged forced labor. Economies such as China, India, Japan, South Korea, Brazil, and Switzerland would be subject to a tariff of 12.5%. The recommended tariffs are the result of investigations initiated under Section 301 of the Trade Act of 1974. The levies will not take effect immediately and are subject to a public consultation and review period before implementation, which could lead to changes before the obligations are formalized.

Our Take

This measure will test the tolerance of the United States' main economic partners, which have largely refrained from retaliating against Trump's tariffs, opting instead to negotiate agreements to reduce import taxes and ensure market access. The Mexican government expressed confidence that the proposal could be modified through the bilateral conversations both countries will hold in the coming weeks, in the context of the USMCA review.

Corporate News

Volaris reported its preliminary May 2026 traffic statistics. Capacity measured in available seat miles (ASMs) declined 0.4% year-on-year, while RPMs increased 4.9%, implying an improvement in network load factor density. The domestic Mexico segment recorded an RPM decline of 1.4%, while the international segment advanced 15.9%. The consolidated load factor stood at 86.2%, an increase of 4.3 percentage points compared to the same month the prior year. During May, Volaris transported 2.7 million passengers.

Our Take

Volaris's May report presents a neutral reading in a challenging operating context: the airline managed to raise its load factor with practically flat capacity. Since its last earnings report, Volaris withdrew its annual guidance and anticipates capacity growing between 0%–2% for the second quarter.

SpaceX set the price of its initial public offering at US$135 per share, with a placement of 555.6 million shares that would raise US$75 billion, according to Reuters reports. The Nasdaq debut under the symbol SPCX is scheduled for June 11. SpaceX had revenues of US$18.7 billion in 2025 and presented investors with a potential market of US$28.5 trillion that includes rockets, satellite connectivity, orbital data centers, and AI infrastructure.

Palo Alto Networks reported guidance for the next quarter above consensus and raised its annual earnings guidance to US$3.77–3.79 per share. CEO Nikesh Arora noted that the latest AI frontier advances have increased the level of urgency in cybersecurity. Anthropic's Mythos model, the company's most advanced, currently available only to trusted organizations, has been cited as a tool capable of discovering cybersecurity vulnerabilities that had gone undetected for years, simultaneously generating demand for protective solutions.

The to-do list

  • Follow the May ISM services index and the Fed's Beige Book today, two key pieces for calibrating the state of the US economy before Friday's employment report.

  • Monitor the peso-dollar exchange rate: the proposed 10% tariffs on Mexico under Section 301 are a new pressure on the currency in the midst of the USMCA review.

  • It's Wednesday, a good moment to review that the week's pending matters are up to date before Thursday.

  • Tonight, do a Pilates or yoga session at home, a week with attacks in Bahrain, new tariffs, and SpaceX listing on Wednesday calls for deliberate moments of calm.

  • Today marks the start of the NBA Finals between the New York Knicks and the San Antonio Spurs, an exciting event for basketball fans.

Today's quote…

"In the middle of difficulty lies opportunity."

— Albert Einstein