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IBERIAN DAILY 07 DECEMBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: AMADEUS, BANKING SECTOR, ELECTRICITY SECTOR.

EU puts spotlight on US tech stocks
European stock markets fell in view of the possibility of greater monetary tightening in 2023 and tougher regulations on US tech companies’ advertising models. Thus, the Euro STOXX suffered losses, led by Technology and Autos, whereas Household Goods and Insurance were among the few sectors with gains. On the macro side, in Germany October’s factory orders rose more than expected, with the previous data being raised. Separately, the German Constitutional Court has dismissed two legal challenges against the EU’s € 750 Bn Covid-19 recovery fund (Next Generation EU). From the ECB, Constantinos Herodotou mentioned that we are near the neutral rate, but he suggested new rate hikes in the short term. In the US, the commercial deficit rose slightly less than expected in October. In China, November’s imports and exports contracted more than expected. Separately, the Govt. will continue to ease the zero-Covid policy, allowing at-home confinement for close contacts and restricting tests needed to access public spaces. On another note, the Politburo suggested that recovering growth will be the medium-term target (5% by 2023), focusing on stimulus measures. In Japan, Nakamura pushed for maintaining the BoJ’s ultra-lax policy until inflationary salary pressures are seen.
What we expect for today
European stock markets would open flat, awaiting drivers, with better performance possibly coming from stocks linked to China (especially consumer goods). Currently, S&P futures are flat (the S&P 500 ended down -0.29% vs. the European closing bell). Volatility in the US rose (VIX 22.17). Asian markets are falling (China’s CSI 300 -0.48% and Japan’s Nikkei -0.79%).
Today in Germany we will learn October’s industrial output, in the euro zone the final 3Q’22 GDP, in the US non-farm productivity and 3Q’22 unit labour costs and in Brazil the BoB will meet.