The Expansion of Humanity
November 12, 2024
Theme of the week:
Since time immemorial, human beings have felt a deep concern to expand and colonize new territories, gradually managing to spread to encompass all habitable regions of the Earth. The evolutionary expansion of modern humans was a turning point, marked by migrations from Africa to Asia thousands of years ago. Taking advantage of periods of warm climate, they crossed into Asia and, later, reached the American continent across the ice bridge that joined them some fifteen thousand years ago. In the course of these migrations, humans developed unique adaptive skills that enabled them to inhabit diverse environments – from frozen tundras to jungles and deserts – shaping the environment to meet their needs for food, shelter and water.
This expansion was not limited to physical and geographic adaptation alone, but also resulted in commercial expansion, essential to the economic and cultural development of human civilization. From ancient overland routes to modern global enterprises, each era of trade expansion has profoundly transformed the world.
One of the first great trade routes, the Silk Road (2nd century BC to 15th century AD), connected Asia, Europe and North Africa, enabling not only trade, but also cultural, scientific and religious exchange between East and West. European maritime expansion from the 15th to 17th centuries, known as the Age of Discovery, led humans to venture across the oceans, opening new routes and colonizing distant lands. The Industrial Revolution (18th-19th centuries) drove an unprecedented expansion, with technological innovations and the emergence of railroad routes that multiplied global trade.
Thus we arrive at Modern Globalization (20th century onwards), in which multinational companies exploit markets, resources and labor worldwide, even expanding into cyberspace through digital commerce. Now, at this point, what does the future hold, and are we close to an expansion into space?
Recent advances in space exploration and technological achievements have renewed interest in this possibility. Human expansion into space involves much more than sending people beyond Earth; it is a long-term vision for establishing a sustainable human presence beyond our planet, driven by growing collaboration between governments and the private sector.
In this context, NASA’s Artemis program plans not only to return to the Moon, but to establish a sustainable presence on its surface and orbit, laying the foundation for a lunar economy. Furthermore, this program is seen as a prelude to the goal of landing a human being on Mars in the 2030s. NASA has recently launched a solicitation with a $3 million award to address the problem of debris on the Moon, as astronauts on the Apollo missions left 96 bags of trash on the satellite, presenting a challenge for future extended presence missions.
Equally relevant is the emergence of space tourism and commercial spaceflight, which are already a reality. Access to space, once the exclusive domain of governments, is being opened up to private companies and, eventually, to tourists. This change makes a constant human presence in space more feasible and opens the possibility of a space economy. While the first commercial flight was Virgin Galactic’s Galactic 01 mission in 2023, last September, the private Polaris Dawn mission achieved a new milestone by conducting the first commercial spacewalk, marking a significant breakthrough for the industry. These advances reflect the growing interest and accelerating technology to expand human presence beyond Earth, with the goal of making space a viable and sustainable habitat for future generations.
The history of human expansion is ultimately a testament to how curiosity, adaptation and ingenuity have been fundamental to the survival and cultural, linguistic and technological development of societies. From the earliest settlements in Eurasia to today’s space exploration, the drive to explore and colonize new horizons has been a constant in our history: a tireless search for new possibilities and challenges.
The beacon of the markets:
The outcome of the U.S. election with Trump’s solid victory has notably conditioned the performance of stock markets globally. US indices reacted, as expected, with significant gains on expectations of less regulation and lower tax burdens that should support earnings growth. The S&P 500 closed Friday at 5,995.54 points, up +4.66%, while the Nasdaq 100 was up +5.41%. Both indices set new all-time highs at 6,012.45 and 21,155 points respectively.
Europe bore the brunt of fears of a tariff war. The falls were generalized in the markets of the old continent, with the Eurostoxx 50 dropping -1.53% and the Ibex 35 -2.43%, especially penalized by the exposure of large companies related to renewable energy generation.
In the fixed income market, debt yields had already been rising for some weeks now, in view of the forecast of a larger budget deficit that could alter the Fed’s roadmap in terms of the timing and intensity of the interest rate cut. This is reflected in the fact that analysts now expect rates to fall no further than 3.50%-4%, when a few weeks ago a floor around 3% was anticipated.
Government bonds maturing in 10 years closed the week with slight drops in their yields compared to those of the previous week and far from the highs seen on Thursday. Thus, the Treasury fell to 4.31%, the Bund to 2.41% and the Bono to 3.10%, i.e. -8, -5 and -2 bps. It is worth noting that it was in Friday’s session and especially in the afternoon that bond yields fell.
Gold seems to have encountered a first obstacle in its rise in the area of 2,800 USD/OZ, negatively affected by the rate hike, so it closed with a 2% fall at 2,695.80USD/Oz. For its part, Brent rose by 1%, and the fact is that oil continues to navigate between the pressure of several external factors, on the one hand, there is the conflict in the Middle East, on the other hand, the low economic activity in China and thirdly the arrival of Trump could favor a rise of the production in the USA. This week we will know the monthly reports from OPEC and the IEA that will shed more light on future estimates of global supply and demand.
At the macroeconomic level, it is worth noting that the data released in China was slightly better than expected. The Caixin services PMI rose to 52 versus the forecast of 50.5, while exports grew by 12.7% versus the expected 5%. The CPI remained at 0.3%. In Europe, we can only highlight a slight improvement in the PMIs, both manufacturing and services, and a slight improvement in retail sales. Although the changes have been modest, they could suggest that the worst may be over. In the US, the data, as almost every week, was mixed, but with a positive tone as in the PMIs. The election result put the Fed’s decision on the back burner, which lowered the 25 bps that the market was discounting. The question now is whether rates will be lowered again in December, a fact to which the market gave a 75% probability at the end of last Friday.
Throughout the week, macro references will be scarce, but we can highlight the GDP data in Europe (+0.9% est.), in the US the CPI data for October (+2.4% est.) and retail sales for the month of October, which would have grown by +0.3% in the month. Finally, on Thursday, Christine Lagarde and Jerome Powell will appear in various forums.
The earnings season is nearing its end, and good figures have been presented in general. In the United States, 452 of the 500 companies in the S&P 500 have already reported their results, with an average EPS growth of +8.4% compared to the +5.1% initially expected. Seventy-five percent exceeded market expectations, 7% were in line and only 18% disappointed analysts.
The phrase:
And we say goodbye with the following phrase from Lao Tse, considered one of the most relevant philosophers of Chinese civilization: “Gratitude is the memory of the heart”.
Summary of the behavior of the main financial assets (11/11/2024)
This report does not provide personalized financial advice. It has been prepared irrespective of the particular financial circumstances and objectives of the persons receiving it.
This document has been prepared by Portocolom Agencia de Valores S.A. for the purpose of providing general information at the date of issue of the report and is subject to change without notice. Portocolom Agencia de Valores S.A. assumes no obligation to communicate such changes or to update the contents of this document. Neither this document nor its contents constitute an offer, invitation or solicitation to purchase or subscribe for securities or other instruments or to make or cancel investments, nor may they form the basis of any contract, commitment or decision of any kind.
The information contained herein has been obtained from public sources believed to be reliable, and while reasonable care has been taken to ensure that the information contained herein is neither uncertain nor unequivocal at the time of publication, we do not represent that it is accurate and complete and it should not be relied upon as if it were. Portocolom Agencia de Valores S.A. assumes no responsibility for any loss, direct or indirect, that may result from the use of the information provided in this report. Past performance of variables may not be a good indicator of future performance.