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IBERIAN DAILY 24 SEPTEMBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: AMADEUS, MEDIASET ESPAÑA.

MARKETS YESTERDAY AND TODAY


Profit taking on the market
Sell-off in Europe after the expectations of a trade agreement between China and the US sank, whereas international trade indicators continue to deteriorate (South Korean exports fell -21.8% YoY in the first 20 days of September, the biggest drops since 2009). All this led to profit taking in the Euro Stoxx, with the poorest performers being Basic Materials and Banks, with Utilities and Food remaining more stable. On the macro side, in the euro zone September’s preliminary manufacturing and services PMI were disappointing, with the former seeing its contraction deepen and the latter falling. In the ECB, appearing before the European Parliament, Mario Draghi called for a fiscal instrument to complete the monetary policy, warning on the risks of a downturn. In the US, the Chicago Fed activity index beat expectations, returning to positive numbers. In Mexico, September’s retail sales recovered more than expected. In Japan, September’s preliminary manufacturing PMI fell to 48.9, bringing the services figure down to 52.8, suggesting almost zero growth in 2Q’19. Separately, the trade agreement between Japan and the US has been delayed due to a lack of agreement regarding the auto sector. In China, the Governor of the PBoC warned that it will maintain a cautious monetary policy, reducing the possibility of massive monetary stimuli.
What we expect for today
After yesterday’s profit taking, the markets will once again rise despite the fragile macro environment. Currently, S&P futures are up +0.43% (the S&P 500 was unchanged vs. its price at the closing bell in Europe). Volatility in the US fell (VIX 14.91%). The Asian markets that are open are rising (Hong Kong +0.47% and Japan +0.25%).
Today in Germany we will learn September’s IFO, in the UK the Supreme Court will issue its ruling on the prorogation of Parliament, in the US September’s Conference Board consumer confidence, August’s new home sales and September’s Richmond Fed activity index. In debt auctions: Germany (€ 4 Bn in bonds due 2021).