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IBERIAN DAILY 20 MAY (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACS, CHANGES IBEX.

The Ibex also sees falls
The US sales seen last Wednesday dragged down Europe yesterday, where all the main indices fell. Even though the Ibex put an end to a pattern of 4 consecutive rises, peripheral countries showed a better performance (particularly Italy’s MIB). Thus, within the Euro STOXX, all sectors ended in negative territory, with Banks and Utilities being the best relative performers vs. the losses of Food and Household. On the macro side, in the euro zone the ECB minutes showed the debate on the pace to tighten the monetary policy and the need of a faster normalisation process to avoid further rises in inflation expectations. Separately, the EU agreed to suspend fiscal rules (deficit and indebtedness) during 2023. Poor macro data in the US, where weekly jobless claims climbed more than expected, the Philadelphia Fed index dropped much more than expected and existing home sales fell more than expected. In China, the PBoC cut the 5Y interest rate (which affects mortgages) more than expected, -15bps to 4.45%, leaving the 1Y rate unchanged at 3.7%. Separately, Shanghai saw a record number of Covid-19 cases outside the quarantine areas. In Japan, inflation rose in April in line with expectations to 2.1% YoY, whereas the core figure rose to 0.8%.
What we expect for today
The European stock markets would open with gains of +1.0%, with growth performing well thanks to the drop in sovereign bond yields. Currently, S&P futures are up +0.7% (the S&P 500 ended unchanged vs. the European closing bell). Volatility in the US fell (VIX 29.35). Asian markets are rising (China’s CSI 300 +1.7% and Japan’s Nikkei +1.3%).
Today in the euro zone we will learn May’s consumer confidence and in the United Kingdom April’s retail sales.

COMPANY NEWS

IBEX 35 Technical Advisory Committee to meet on 09 June. We expect changes.
On 09 June the IBEX Technical Advisory Committee will meet for its first annual meeting (the next one is to be held in December). The best-positioned companies to enter the IBEX would be Sacyr and Acciona Energía (listed since July’21, although with limited liquidity, and its parent company Acciona is already on the index), whereas Almirall and CIE (in that order) would be candidates to be removed. There could also be a weight change in Rovi (increasing its weight).