EUR 100.00 For Business Accounts Only

IBERIAN DAILY 13 DECEMBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACCIONA, AMADEUS, BANKIA, FCC, GRIFOLS, IBEX 35, TELEFONICA.

MARKETS YESTERDAY AND TODAY

Stock markets rally after the ECB meeting and the progress made in the trade talks
Stock markets rallied worldwide following the ECB meeting, boosted also by the positive tone of the US-China trade talks. Within the Euro STOXX, Banks and Travel & Leisure were the best-performing sectors, whereas Food and Real Estate posted losses. On the macro side, in Germany, November’s final inflation data came in as expected. In the Euro zone, the ECB maintained the QE programme unchanged, suggesting that that the slowdown in the Euro zone seems to be hitting rock bottom. C. Lagarde promised to review the institution’s strategy in 2020, claiming that she will maintain rates unchanged for as long as necessary to promote the conditions for economic growth in the Euro zone. Separately, the ECB lowered its inflation estimate for 2020 from 1.1% to 1.0% (downward pressure on energy prices) and raised its GDP estimate for 2019 from 1.1% to 1.2%. In the US, November’s production prices came in slightly below expectations, whereas weekly jobless claims came in higher than expected. On another note, D. Trump revealed that the trade agreement with China is near (the press claims that Phase I would be ready to be signed) and that the government will cancel the tariff increase expected for the 15th of December on imports worth US$ 160 Bn. At the same time, he expressed his willingness to half the tariffs imposed on US$ 360 Bn worth of imports. In the UK, awaiting for the vote counting to finished, B. Johnson would have obtained a sufficient majority to govern (355 seats vs. 326 needed for a majority) and have his Brexit deal passed (J. Corbyn steps down as leader of the labour party). In Japan, Tankan index deteriorated in the 4Q more than expected while October’s industrial output was cut unexpectedly (greater annual slowdown).
What we expect for today
European stock markets would open with gains >+1.0%, led by cyclical companies and stocks sensitive to international trade (Automobiles, Basic Resources, Industrials) although the FTSE would be dragged down by the strong depreciation of the pound (below 0.83), in view of the victory by majority of B. Johnson (attention to stocks with exposure to the UK such as IAG, Iberdrola, Santander mainly). Currently, S&P futures are up +0.5% (the S&P 500 closed up +0.36% vs. its price at the closing bell in Europe). Volatility in the US fell (VIX 13.94%). Asian markets are climbing (Japan +2.55% and Hong Kong +2.26%).
Today we will learn in the US November’s retail sales and in Brazil the economic activity index. In ratings, Fitch will revise Spain’s (A-, stable).

COMPANY NEWS

CHANGES IBEX 35: As expected, no changes have been made to the composition of the IBEX 35. As for weights, the free float factors of Acerinox and MásMóvil will be raised (from 80% to 100% in both cases) while those of Colonial and Naturgy will be lowered (from 80% to 60% and from 60% to 40%, respectively). Changes will be applied as of the close of the 20th of December, coming into force on the 23rd.