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IBERIAN DAILY 01 NOVEMBER + 3Q’21 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACERINOX, ARCELOR, FERROVIAL, IAG.

MARKETS YESTERDAY AND TODAY

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 3Q’21 results to be released over the coming days in Spain.

Yet another good week for stock markets
The good results season offset the disappointing macro data, and the European and US stock markets ended the week with gains of around 1%. The Ibex closed October at 4-month highs, above 9,000 points. Within the Euro STOXX, the week’s best-performing sectors were Autos and Basic Resources vs. the drops in Real Estate and Household Goods. On the macro side, in the Euro zone, October’s inflation increased above expectations, whereas the 3Q’21 GDP grew more than expected to 3.7% YoY. In Spain, the 3Q’21 GDP slowed more than expected to 2.7% YoY according to the INE, moving away from the annual target of 6.5%, whereas the CEOE sees a risk of the GDP not returning to pre crisis level until 2023. Retail sales recovered less than expected. Separately, the PMI pointed out that it expects to make small changes to the labour reform. In Germany, the 3Q’21 GDP slowed in line with expectations. In Japan, F. Kishida won the elections, maintaining an absolute majority. The G20 meeting disappointed due to the absence of large agreements to combat climate change. The US and the EU agreed to ease tariffs on billions of steel and aluminium products. In China, the PMIs disappointed, with the manufacturing PMI falling below growth levels (>50) and the Services one below expectations. The Govt. also announced that it will release state diesel and gasoline reserves to alleviate the supply crisis. In US business results, Aon, Colgate, Philips and Exxon Mobil came in better, and Royal Caribbean worse.
What we expect for today
The European stock markets would open with gains following the Asian session, where the Democratic Liberal Party won the election in Japan. Currently, S&P futures are up +0.15% (the S&P 500 ended unchanged vs. its price at the closing bell in Europe). Volatility in the US dropped (VIX 16.26). Asian markets are mixed (China’s CSI 300 -0.90% and Japan’s Nikkei +2.60% after the presidential election).
Today we will learn in Spain October’s manufacturing PMI, and in the US October’s ISM manufacturing index and September’s construction spending. In debt auctions: Germany (€ 6 Bn in 3M and 9M T-bills) and the Netherlands (€ 2 Bn in 4M and 6M T-bills). In US business results, Loews Corp, Hologic and McKesson, among others, will release their earnings.