IBERIAN DAILY 11 OCTOBER (ANÃLISIS BANCO SABADELL)
NEWS SUMMARY: AEDAS HOMES, BBVA, ELECTRICITY AND GAS SECTOR, OHL.MARKETS YESTERDAY AND TODAY
Markets confident China-US deal will be reached
The possibility that the current round of talks will put an end to the trade war, along with a possible Brexit agreement on 31/10, encouraged gains across Europe. Within the Euro STOXX, the best-performing sectors were Banks and Basic Resources, whereas Pharma and Food saw the biggest drops. On the macro side, in Germany, August’s trade balance saw its surplus fall more than expected, while August’s exports dropped more than expected. In the Euro zone, the minutes from the ECB meeting on 12 September showed a divided board, with some members backing further rate cuts and almost one third against resuming the QE programme. On another note, the guidelines for the EU common budget have been agreed, with “only†€ 17 Bn budgeted for the 2021-27 period. In the UK, B. Johnson’s meeting in Ireland led to a joint communiqué from both countries regarding the possibility of reaching an exit agreement next week, although the British Parliament will once again be the main hurdle. In the US, weekly jobless claims fell once again, and September’s inflation rate remained at 1.7% (below expectations), far from core inflation (2.4%). From the Fed, N. Kashkari was in favour of new rate cuts if data continues to disappoint, while R. Kaplan was in favour of waiting until the impact from past cuts is seen.
What we expect for today
The markets will extend the gains from yesterday at today’s opening bell, driven by the optimism regarding China-US trade negotiations. Currently, S&P futures are up +0.37% (the S&P 500 was down -0.39% vs. its price at the closing bell in Europe). Volatility in the US fell (VIX 17.57%). The Asian markets that are open are rising (Hong Kong +2.43% and Japan +1.15%).
Today we will learn: in Germany and Spain, September’s final inflation; in the US, September’s import prices and the University of Michigan consumer confidence (preliminary) for October. In debt auctions: Italy (€ 8 Bn in bonds due 2023, 2026, 2040 and 2049).
Aedas Homes is engaged in the housing development business in Spain. The company has a portfolio of approximately 1.5 million square meters of land that it develops for residential purpose. Co. develops multifamily homes for the housing market in Madrid, Catalonia, Levante and Majorca, Costa del Sol and Seville.
Banco Bilbao Vizcaya Argentaria is an international financial group, engaged primarily on providing banking services and consumer finance to private individuals and businesses in Spain and Portugal; providing real estate activity in Spain; providing services to international companies and investment banking, capital markets and treasury management services to clients; and providing the banking, insurance and pension businesses in Mexico and the U.S., as well as in South America.
Obrascon Huarte Lain is an international concession and construction groups based in Spain. Co. maintains significant operations in 30 countries across all five continents. Co. is engaged in hospital and railway construction, transport infrastructure concessions, oil and gas, energy, solids handling and fire protection systems and international contracts. Co.'s operations are organized along four divisions: OHL Concesiones, OHL Construccion, OHL Industrial y OHL Desarrollos. Co. is also engaged in real state project developments of mixed use managed by the international hotel chains.
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