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IBERIAN DAILY 19 OCTOBER + 3Q’21 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACS, ELECTRICITY SECTOR, MAPFRE.

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.

China and inflation continue to be a source of concern for stock markets
It was yet another session of losses on the global stock markets following the disappointing 3Q’21 GDP data in China, with reports suggesting that the country’s energy problem might aggravate. Thus, within the Euro STOXX, almost all sectors posted losses, led by Travel&Leisure and Autos. On the other hand, Energy posted slight gains, whereas Media ended virtually flat. On the macro side, in the Euro zone, the revision of the member states’ budgetary rules kicks off today to adapt to the reality of higher public debt levels (easing the current 60% target) and the cost of transitioning to zero CO2 emissions economies. From the ECB, I. Visco expects the distortions created by bottlenecks to be temporary, although they will keep inflation at “high levels” until next year. In the US, September’s industrial output contracted unexpectedly. The stockpiles/orders ratio of the ISM manufacturing index continues to hint at a decline over the next few months. Separately, October’s NAHB construction index climbed unexpectedly. On another note, the equity asset sales conducted by J. Powell during the pandemic would complicate his re-election as the Fed’s chairman although we believe this would not be a problem for the market. In China, PM Li Keqiang stated once again that the Govt. will meet its growth targets this year (>6%). In US business results, State Street came in as expected.
What we expect for today
European stock markets would trade with slight gains that could ease throughout the session with the better relative performance of technology companies. Currently, S&P futures are flat (the S&P 500 was up +0.33% vs. its price at the closing bell in Europe). Volatility in the US rose (VIX 16.31). Asian markets are rising (China’s CSI 300 +0.9% and Japan’s Nikkei +0.6%).
Today we will learn in the US September’s building permits and housing starts. In US business results, Bank of New York Mellon, Johnson & Johnson, Procter & Gamble, Phillip Morris and Netflix, among others, will release their earnings. In debt auctions: Spain (€ 2.5 Bn in 3M and 9M T-bills).