IBERIAN DAILY 19 MAY (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: ACCIONA, BBVA, NATURGY, TÉCNICAS REUNIDAS.The Ibex, the best-performing index in the euro zone
Inflation, the hike in debt interests and the market adjustment to growth prospects prevailed in a negative session at both sides of the Atlantic (especially in the US, which sped up the losses after the European closing bell), mainly for growth. Thus, within the Euro STOXX, almost all sectors ended in the black, with Energy and Utilities being the best relative performers vs. the losses of Technology and Household. On the macro side, in the Euro zone, April’s final inflation was cut slightly to +7.4% YoY from 7.5% preliminary whereas in the UK it speeded up slightly less than expected to +9% YoY, 40-year highs. Separately, in its REPowerEU plan to obtain energy independence and transition to clean energies, the EU mentions short-term measures such as the possibility of price caps on gas and rationing in the case of supply problems, as well as boosting coal and nuclear energy, despite the fact that the medium- and long-term goal continues to be to develop renewable energies. In Spain, the BoS will once again lower GDP’22 growth following the disappointment from 1Q’22, which will probably come in below the 4.0% released by the EU and the 4.3% from the Govt., while the organisation’s Governor, Hernandez de Cos, was in favour of raising rates to 1.0% in 2023. In the US, housing starts and construction licenses dropped more than expected in April. In US business results, Lowe’s came in better than expected, whereas Walmart disappointed the market.
What we expect for today
The European stock markets would open with drops of around -1.0%, dragged down by Technology stocks, in line with the performance of the US stock markets yesterday, where the indices suffered their biggest drop in two years. Currently, S&P futures are up +0.1% (the S&P 500 ended down -1.16% vs. the European closing bell). Volatility in the US rose (VIX 30.96). Asian markets are falling (China’s CSI 300 -0.5% and Japan’s Nikkei -1.72%).
Today in the euro zone we will learn the ECB minutes, in the US May’s Philadelphia Fed, April’s existing home sales and weekly jobless claims. In debt auctions: Spain (€ 6 Bn in bonds due 2025).
Acciona is the parent company of a construction group. Co. is engaged in general construction activities in the areas of civil engineering and buildings, including railways, marine and hydraulic works, motorways and airports, town planning, conduits, pavements, parking lots, and industrial and urban buildings. In addition, Co. is engaged in the provision of real estate services, the operation of parking lots, telecommunications, services, ecology and alternative means of energy. Co.'s operations are organized in six business divisions: Infrastructures, Real Estate, Energy, Water, Environmental & Urban Services and Logistic & Transport Services.
Banco Bilbao Vizcaya Argentaria is an international financial group, engaged primarily on providing banking services and consumer finance to private individuals and businesses in Spain and Portugal; providing real estate activity in Spain; providing services to international companies and investment banking, capital markets and treasury management services to clients; and providing the banking, insurance and pension businesses in Mexico and the U.S., as well as in South America.
Tecnicas Reunidas is a general contractor company based in Spain. Co. engages in the engineering, design, and construction of industrial facilities for refining and petrochemical, oil and gas, power, and infrastructure and industries sectors worldwide. Co. constructs nuclear plants, conventional thermal plants, and renewable energy and cogeneration facilities for power sector; refineries and facilities for petrochemicals; water treatment, desalination, waste management, air, land, and marine transport facilities; and liquefaction, and storage facilities, as well as oil and gas fields and pipelines. Co. also provides engineering, management and operating services for industrial plants.
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