IBERIAN DAILY 15 APRIL (ANÃLISIS BANCO SABADELL)
NEWS SUMMARY: ACERINOX, ALMIRALL, CELLNEX, FCC, IAG, INDITEX, OHL.MARKETS YESTERDAY AND TODAY
Markets consolidating levels
Most of the European stock markets rallied despite the dramatic prospects released by the IMF, which suggest an -8% drop in the Spanish economy in 2020 and -7.5% in the euro zone. Italy would record the biggest contraction (-9.1%), with France and Germany also falling more than -7%. The US would see a -5.9% slowdown and emerging countries -1.0%, mainly dragged down by LatAm, with -5.2% and Eastern Europe -5.2% while Asia would remain at 1.0%. In any event, the IMf foresees a significant recovery of the global economy in 2021 of up to 5.8% vs. -3.0% expected in 2020. In the Euro Stoxx, the best-performing sectors were Retail and Consumer Goods, with Real Estate and Travel & Leisure posting the biggest losses. On the macro side, in Spain, the Govt. ha approved a one-month tax moratorium for SMEs and the self-employed, and the IMF estimates that unemployment could reach 21%. In France, March’s retail sales would have fallen -24%, according to the Bank of France. From the Fed, J. Bullard estimates that confinement is costing the country US$ 25 Bn daily in lost income. On another note, D. Trump warned that he will temporarily suspend the contributions to the WHO due to its poor management of the pandemic, among other factors, (15% of the body’s budget). Meanwhile, the Treasury reached an agreement with the country’s airlines for a US$ 25 Bn aid package. In China, the PBoC cut the medium-term financing rate (MLF) by -20bps to record lows of 1.95%, suggesting a cut to the reference rate (LPR) in the next meeting due on the 20th of April. The number of new cases of Covid-19 fell again to 46 although the border with Russia is a source of concern in view of the increasing number of cases in its neighboring country. In business results, the 1Q’20 campaign has kicked off in the US, with JPM and Wells Fargo coming in below expectations, whereas Johnson&Johnson and FRC beat expectations.
What we expect for today
The markets would open with a slightly bearish slant awaiting US retail sales data, which could show a -8.0% MoM drop. Currently, S&P futures are down -0.57% (the S&P 500 ended +0.96% higher vs. its price at the closing bell in Europe). Volatility in the US fell (VIX 37.76%). Asian markets are sliding (Japan -0.17% and Hong Kong -0.28 %).
Today in Spain we will learn March’s final inflation figure and in the US March’s retail sales and industrial output, April’s Empire manufacturing index, the NAHB real estate index and the Beige Book. In US business results, PNC, BAC, SCHW and GS, among others, will release their earnings. Debt auctions: Germany (€ 1 Bn in 2.5% bonds due 2044).
Acerinox is the parent company of a group engaged in the manufacture and sale of flat and long stainless steel products, and stainless steel wires. Co.'s major products include slabs, billets, black coils, plates, hot-rolled coils, hot-rolled sheets, flat bars, hot-rolled re-bars, hot-rolled black bars, engraved sheets, cold-rolled coils, cold-rolled sheets and circles. Co. also provides long stainless steel products, such as wire rods, angles, hot rolled flat bars, hot rolled re-bars, reinforced bars in coils, cold rolled re-bars, hot rolled black bars, cold drawn bars, and smooth turned bars. In addition, Co. offers wires, welding wire bars, and bars for electrodes.
Almirall is engaged in the acquisition, manufacture, storage, sale and mediation in the sale of pharmaceutical specialties and products and all manner of raw materials used to prepare pharmaceutical specialties and products. Also, Co. acquires, manufactures, storages, sales and mediates in the sale of cosmetics, chemical, biotechnological and diagnostic products for human, veterinary, agrochemical and food-industry use, as well as all manner of utensils, complements and accessories for the chemical, pharmaceutical and clinical industries. In addition, Co. is engaged in the acquisition, sale, lease, subdivision and development of land lots, land and properties of all kinds.
Cellnex Telecom SA is a Spain-based company engaged in the wireless telecommunications (telecom) business. Its activities are divided into three segments: Broadcasting infrastructure, Telecom site rental, as well as Network services and other. The Broadcasting infrastructure division comprises distribution and transmission of television (TV) and frequency modulation (FM) radio signals, operation and maintenance (O&M) of radio broadcasting network, as well as over-the-top (OTT) radio services, among others. The Telecom site rental division provides access to wireless infrastructure, primarily through infrastructure hosting and telecom equipment co-location, mainly for mobile network operators and other wireless and broadband telecom network operators. The Network services and other division offers connectivity services for a variety of telecom operators and radio communication, among others. The Company also develops 5th generation mobile networks (5G) through Alticom BV.
Fomento de Construcciones y Contratas is the parent company of a group engaged in sanitation services, cleaning, maintaining, purification and distribution of water, construction of highways, hydraulic works, marine works, air and rail transport infrastructure, urban developments, housing, non-residential buildings, office buildings, toll highways, parking garages, marinas and water treatment plants. Co. is also engaged in the manufacture and sale of cement and cement infrastructures, such as precast concrete elements; and in the financial markets, and real estate development, leasing and tourism.
International Airlines Group is an international scheduled airline and global premium airlines. Co.'s principal place of business is London with significant presence at Heathrow, Gatwick and London City airports.
Obrascon Huarte Lain is an international concession and construction groups based in Spain. Co. maintains significant operations in 30 countries across all five continents. Co. is engaged in hospital and railway construction, transport infrastructure concessions, oil and gas, energy, solids handling and fire protection systems and international contracts. Co.'s operations are organized along four divisions: OHL Concesiones, OHL Construccion, OHL Industrial y OHL Desarrollos. Co. is also engaged in real state project developments of mixed use managed by the international hotel chains.
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