EUR 100.00 For Business Accounts Only

IBERIAN DAILY 14 FEBRUARY (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACS, ELECTRICITY SECTOR, LAR ESPAÑA, RED ELÉCTRICA.

MARKETS YESTERDAY AND TODAY

China increases uncertainty after reporting new coronavirus cases
China’s announcement yesterday of 15,000 new cases of coronavirus (5,000 today) based on a methodology change brought uncertainty surrounding whether the epidemic was controlled, as well as drops on stock markets during the morning. Subsequent comments made by the WHO that the change in methodology for counting the cases did not contradict the idea that cases of infection were falling allowed the indices to recover during the afternoon. In the Euro Stoxx, we highlight Utilities and Insurance on the positive side, where as the most cyclical sectors and those exposed to China such as Basic Resources and Autos were the worst performers. On the macro side, in the euro zone January’s inflation grew in line with expectations, remaining at last month’s 1.7%. The IMF stressed the positive impact from 2012’s labour reform on Spanish employment levels. In Mexico, the BoM cut, as expected, the reference interest rate by 25bps to 7.0% In the US, January’s inflation grew more than expected, whereas the Fed decided to lower the cap for repo operations. In US business results, Pepsi, Kraft Heinz and Linde beat expectations, with Duke Energy disappointing.
What we expect for today
Stock markets would see a slightly bullish opening with a weak euro and a flat Brent crude price. Currently, S&P futures are unchanged (the S&P 500 closed unchanged vs. its price at the closing bell in Europe). Volatility in the US increased (VIX 14.15%). Asian markets are trading with mixed results (Japan -0.63% and Hong Kong +0.37%).
Today in the euro zone and Germany we will learn the 4Q’19 GDP, in Spain the inflation data and in the US the University of Michigan confidence. In US business results, PPL and Newell, among others, will release their earnings.