EUR 100.00 For Business Accounts Only

IBERIAN DAILY 14 OCTOBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACS, EUSKALTEL, FERROVIAL.

MARKETS YESTERDAY AND TODAY

Profit-taking led by value stocks
The world’s stock markets paused for a break following the rises from the previous session in the absence of significant progress being made in the negotiation of a fiscal stimulus package in the US (Pelosi rejected McConnell and the White House’s proposal for US$ 1.8 Tn) and with the burden of the pause in J&J’s search for a vaccine and Eli Lilly’s antibody treatment. The IMF’s better growth forecast (Spain was among the hardest-hit developed economies, with an estimated drop of -12.8% and one of the worse debt levels in the world) did not stop markets from posting losses, which were aggravated with the bearish opening of Wall Street. Within the Euro STOXX, almost all sectors ended in the red, with Banks and Insurance leading the drops, and with Telecoms and Personal Household Goods being the best relative performers. In Germany, October’s ZEW index disappointed, falling more than expectation index forecast. In the United Kingdom, A. Baily claimed that the BoE is not willing to implement negative interest rates, whereas the ILO unemployment rate increased to 4.5% from 4.1% previously. From the ECB, L. de Guindos demanded fiscal stimuli from member states to bolster recovery. In the US, September’s inflation climbed to 1.4% from 1.3% previously, as expected. In US business results, Johnson&Johnson and BlackRock beat expectations, as did JP Morgan and Citigroup, although the last two have doubts surrounding their results. Delta Airlines released worse earnings than expected.
What we expect for today
Markets would open with slight gains, while European countries (Netherlands, UK, France, Spain) announce new restrictions to halt the spread of Covid-19. Currently, S&P futures are up +0.3% (the S&P 500 closed -0.34% lower vs. its price at the closing bell in Europe). Volatility in the US increased (VIX 26.07). Asian markets are trading with mixed results (Hong Kong -0.2%, Japan +0.05%).
Today we will learn in the Euro zone August’s industrial output, in Spain September’s final inflation data, and in the US September’s production prices. In US business results, Bank of America, US Bancorp, Goldman Sachs and Wells Fargo, among others, will release their earnings. In debt auctions, Germany (€ 1 Bn in bonds due 2050).