EUR 100.00 For Business Accounts Only

IBERIAN DAILY 04 AUGUST + 2Q'22 RESULTS PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACCIONA, ACCIONA ENERGÍA, TALGO.

At the end of today’s report, and during the entire results season, we will include a presentation with previews for the 2Q’22 results to be released over the coming days in Spain.

Stock markets backed by the good macro data in the US
The long tranche of sovereign bond yields further widened following the good macro data and 2Q’22 corporate earnings in the US (almost 75% of companies beat expectations). Thus, within the Euro STOXX, Technology and Insurance led gains, whereas defensive sectors such as Telecoms and Utilities saw the biggest losses. On the macro side, in the Euro zone, July’s final services PMI data improved slightly vs. the previous reading (51.2 vs. 50.6) thanks to the good data in Spain and France. Separately, retail sales contracted unexpectedly in June. In the US, July’s ISM non-manufacturing index increased unexpectedly, with price subindices slowing significantly. This would point to a 3Q’22 GDP growing by more than the consensus’ estimate of 1.7% QoQ. Moreover, June’s factory orders and durable goods orders (final) came in above expectations. On the geopolitical front, the US Senate approved Finland’s and Sweden’s NATO membership. In Taiwan, the air force was mobilised in response to China’s military manoeuvres as alternative air routes are being negotiated with Japan and the Philippines. In any case, international tensions eased after N. Pelosi left the island to continue her tour in Asia. In Brazil, the BdB raised rates by +50bps, as expected, leaving the Selic rate at 13.75% to contain inflation, which hit levels of 11.2% in July, and the increase in public spending in an election year. Lastly, in its August production meeting, the OPEC+ agreed to a modest increase in production starting in September (+100,000 barrels/day vs. +600,000 in August) following pressure from the Biden Administration. In US business results, Moderna, McKesson and eBay came in better, and Under Armour in line.
What we expect for today
European stock markets would open with gains after the improvement of the cycle sentiment, where we expect a better performance of cyclical sectors that were hardest hit. Currently, S&P futures are down -0.18% (the S&P 500 ended +0.5% higher vs. the European closing bell). Volatility in the US dropped (VIX 21.95). Asian markets are climbing (China’s CSI 300 +1.8% and Japan’s Nikkei +0.7%).
Today we will learn in Germany June’s factory orders. The ECB will publish the minutes of the last meeting held on 21/07. In the United Kingdom, the BoE will hold its meeting, where a +50bps rise in the benchmark rate is expected. Also we will learn in the US the weekly jobless claims and June’s trade balance, and in Mexico July’s consumer confidence. In US business results, ConocoPhilips, WestRock, Kellogg, Warner and Motorola, among others, will release their earnings.