Finding correlations between Mexican stocks and the economy

Macroeconomic trends and the financial markets are intricately linked. To explore these correlations, we've compared government figures from Mexico's National Institute of Statistics and Geography (INEGI) with local equity performance.

We've compared INEGI's Economic Activity Index, which provides an early estimate for real gross domestic product, with the the S&P/BMV IPC – the national, large-cap stock benchmark formerly (and sometimes still colloquially) known as the Mexbol. This benchmark is part of our global equity market offering, sourced from Exchange Data International.

The correlation is plain to see, especially during the pandemic-era plunge and subsequent rebound.

More recently, the Economic Activity Index grew for a third straight month in May, the most recent treading. However, our stock benchmark has been declining, sliding about 9% since mid-May. This could be an early warning that our macroeconomic indicator is set to weaken.

We can also correlate the equity benchmark's sub-sectors with relevant economic indicators. The last four charts compare the manufacturing and utilities sub-index to state statistics on manufacturing production; the industrials sub-index to the Industrial Production Index; construction stocks to official construction output numbers; and retailers' shares to the official retail sales index.

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