EUR 100.00 For Business Accounts Only

IBERIAN DAILY 29 JANUARY (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACS, FLUIDRA, MELIÁ HOTELS, PROSEGUR, SANTANDER.

MARKETS YESTERDAY AND TODAY

Generalised rally
The US rally helped to recover ground in Europe, with the peripheral segment outperforming core regions. In the Euro STOXX, all sectors ended with gains, with Telecoms seeing the highest rise, followed by Insurance vs. the lowest rises of Technology and Real Estate. On the macroeconomic level, in Spain, the unemployment rate ended 2019 at 13.78%, the lowest level since 2008 and job creation above 400,000 people thanks to the 4Q’19 momentum. From the ECB, J. Weidmann admitted that rates will not be raised for some time although he considers that Sept’19 stimulus package was not necessary . In the US, January’s durable goods orders and consumer confidence rose unexpectedly above expectations, suggesting stabilisation in investments in the 4Q’20. On another note, January’s Richmond Fed index grew above expectations in its highest rise since September 2018. In Japan, the BoJ minutes hinted at the harmful effects of negative interest rates. In US Results Pfizer, 3M, Harley-Davidson released disappointing figures, PACCAR slightly above expectations and Apple beat expectations.
What we expect for today
The sharp falls from the past days leave the door open to a rally, which could technically materialize at 3,790 in the Euro STOXX50. Currently, S&P futures are up +0.27% (the S&P 500 closed -0.12% lower vs. its price at the closing bell in Europe). Volatility in the US fell (VIX 16.28%). The Asian markets that are open are trading with mixed results (Japan +0.71% and Hong Kong -2.68%).
Today in the euro zone we will see the release of M3, in Japan consumer confidence and in the US the Fed meeting, wholesale inventories and pending home sales. In US business results, Apple, Starbucks, Ebay, Paypal and McDonalds, among others, will release its earnings. As for auctions, Italy will issue € 6.5 Bn in 6M T-bills and Germany € 4 Bn in 5Y bonds.


COMPANY NEWS

SANTANDER. Worse results in NII but better in the rest of headings. Capital generation beat expectations: FL CET1 at 11.42%. BUY.
In its 4Q’19 Results, NII came in below expectations (due mainly to Spain and the US), while fee revenues fared better than our estimates and more in line with the consensus. In general, we stress a better performance in the rest of headings. In operating Net Profit, only Brazil and SGP came in slightly below the consensus, while the rest of regions came in better. Very good organic generation in FL CET1 of +31bps on the quarter to 11.42% from 11.07% as of 3Q’19(vs. 11.25% BS(e)), which was SAN’s guidance. We expect a positive reception. Conference Call 10:00 (CET).