EUR 100.00 For Business Accounts Only

IBERIAN DAILY 14 DECEMBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACCIONA ENERGÍA, ELECTRICITY SECTOR, GRIFOLS, INDITEX.

Stock markets fuelled by the positive US inflation data
It was a session of gains on both sides of the Atlantic following the publication of November’s US inflation data, which slowed more than expected. Thus, within the Euro STOXX, all sectors posted gains, with Real Estate and Technology leading the way, vs. the worse relative performance of Household Goods and Telecom. In Germany, November’s final inflation was unchanged at 10% YoY and December’s ZEW index fell less than expected, improving for the third consecutive month (albeit still standing in negative territory). On another note, the German Govt. has asked the EC to extend the deadlines to execute the Recovery Plan (Next Generation funds). Several countries are having problems to allocate investments on time (Spain € 77.2 Bn pledged until 31 Dec). The EU Energy summit ended without an agreement to establish a cap on gas prices, which was delayed to 19 Dec. A border tax on coal totalling € 20 Bn was established, however, to finance energy independence. Separately, in the US, inflation slowed in November to 7.1% from 7.7% in October, with the smaller contribution from the energy component standing out. Core inflation also increased less than expected to 6.0% YoY confirming the slowdown in the rise in prices and the already-past peak recorded in June. In Japan, the 4Q’22 Tankan manufacturing and non-manufacturing indices came in slightly above expectations.
What we expect for today
European stock markets would open flat, consolidating yesterday’s recovery and awaiting the Fed’s decision (after the closing bell). Currently, S&P futures are up +0.25% (the S&P 500 ended -0.2% lower vs. the European closing bell). Volatility in the US fell (VIX 22.55). Asian markets are rising (China’s CSI 300 +0.16% and Japan’s Nikkei +0.72%).
Today in the US the Fed will hold its meeting. Also we will learn in the Euro zone October’s industrial output, and in the United Kingdom and Spain, November’s final inflation data.

COMPANY NEWS

INDITEX. Better 3Q’22 Results in sales, strong start to 4Q’22, and stable gross margin target unchanged. BUY.
Better 3Q’22 Results in sales (+11.1% vs. +8.5% BS(e) and +8.8% consensus), meaning that the healthy rates recorded at the beginning of the quarter continue. The gross margin fell by around -76bps in 3Q’22 to 60.1% (vs. ~-70bps BS(e) and -50/-90bps consensus), but EBIT continues to grow significantly (+8.6% vs. +7.5% BS(e) and +7.9% consensus) thanks to good control of operating costs (despite growing around +2% on sales) and stable amortisation. The 4Q’22 guidance (1-Nov/8-Dec) is positive, with a +12%, and the company maintains its guidance’22 of a stable gross margin. All this added to the good performance of sales (and stocks) should underpin the stock’s good performance since 2Q’22 results (~+9% in absolute terms and ~+7bps vs. Ibex 35).