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IBERIAN DAILY 01 FEBRUARY + 4Q’20 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACCIONA, CELLNEX, ELECTRICITY SECTOR, MELIÁ HOTELS.

At the end of today’s report, and during the entire results season, we will include a presentation with positive and negative results highlights and previews for the 4Q’20 results to be released over the coming days in Spain.

MARKETS YESTERDAY AND TODAY

Profit-taking speeds up
Global stock exchanges saw generalised sales in a session with high volatility generated by the liquidity tensions of China’s monetary market despite the BPoC’s battery of stimulus. In the Euro STOXX, cyclical sectors and Automobiles were unexpectedly among the best performers, followed by Real Estate while Insurance and Consumer Goods saw the biggest drops. On the macroeconomic level, in Europe, the reading of the 4Q’20 GDP provided a positive surprise, with Spain (-9.2% YoY), France (-1.3%) and Germany (-2.9%) showing greater resistance than expected to the drop in activity. In Germany, December’s unemployment fell unexpectedly while in Spain, January’s inflation recovered unexpectedly and December’s retail sales curbed the YoY slowdown. On another note, the European Medicines Agency approved the use of AstraZeneca’s vaccine despite the fact that the EU is still negotiating with the company, which would have offered 9M additional doses through March (40 M vaccines in total, 50% of what was agreed upon). In the US, December’s personal outlays closed private consumption at 2.5% q/qa in the 4Q’20 while home sales reduced the slowdown pace in December. On the political front, 10 Republican Senators have proposed a less substantial stimulus package worth US$ 600 Bn. In China, the PBoC injected some 98 Bn yuan in reverse repo operations to mitigate the tightening of monetary markets. In US business results, Colgate and Caterpillar beat expectations, Chevron released disappointing figures.
What we expect for today
We expect Friday’s losses to turn around thanks to stabilisation in Asia and rising raw materials prices. The European stock markets would open with gains of +1%. Currently, S&P futures are up +0.6% (the S&P 500 closed flat vs. its price at the closing bell in Europe). Volatility in the US rose (VIX 33.09). Asian markets are climbing (CSI 300 +1.2%, Japan +1.5%).
Today in Europe we will learn January’s final manufacturing PMI and in the US January’s manufacturing ISM. In US business results, Alexandria and Vertex, among others, will release their earnings. In debt auctions: Germany (€ 6 Bn in 3M and 9M t-bills), Netherlands (€ 2 Bn in 3M and 6M t-bills), and France (€ 5.4 Bn in 3M, 6M and 12M T-bills).