IBERIAN DAILY 26 AUGUST (ANÃLISIS BANCO SABADELL)
NEWS SUMMARY: AEDAS HOMES.MARKETS YESTERDAY AND TODAY
A heightening trade war drags indices down
Stock markets posted slight gains with all eyes on J. Powell, who in the end confirmed expectations of further pre-emptive rate cuts in July, but the announcement of China’s retaliation against the US (import tariffs on US$ 75 Bn worth of US goods, 5% tax on crude oil, 5% tax on soy starting in September and a tariff increase to 10% on autos starting on 15 December 2019) and Trump’s countermeasures (raising tariffs from 25% to 30% on US$ 250 Bn worth of Chinese goods starting in October, and to 15% vs. 10% previously on US$ 300 Bn starting in September) dragged indices down. Within the Euro STOXX, only Real Estate ended in the black among the defensive sectors that showed a relatively better performance, whereas Autos and Banks saw the biggest drops. On the macro side, in the US, new home sales fell more than expected in July. On another note, J. Powell expressed his confidence in economy, speaking in favour of doing what is necessary to maintain the current growth. In Mexico, the 2Q’19 GDP contracted more than expected in YoY terms.
What we expect for today
Stock markets would open with losses of -1.5%, with cyclical sectors being the hardest-hit and defensive sectors favoured by the IRR’s sharp drop of -9.0bps.
Currently, S&P futures are down -0.84% (the S&P 500 closed down -1.44% vs. its price at the closing bell in Europe). Volatility in the US rose (VIX 19.87%). Asian markets are falling (Japan -2.37% and Hong Kong -2.99).
Today, we will learn: in Germany, August’s IFO; in the US, durable goods orders for July and the Dallas Fed activity index for August. In debt auctions: France will issue 3M, 5M, 8M and 12M T-bills totalling €~5 Bn.
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.
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