IBERIAN DAILY 23 SEPTEMBER (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: ARCELOR MITTAL, ELECTRICITY SECTOR, IBERDROLA.
MARKETS YESTERDAY AND TODAY
The Fed announces the tapering
It was another session of positive numbers, with gains of more than +1%, recovering all the ground lost on Monday from the Evergrande crisis, which for the time being has avoided nonpayment on its local debt. US markets had a bullish opening, boosted by European stock markets, with value outperforming growth. In the Euro STOXX, all the sectors posted gains except Pharma and Media, which were the worst relative performers, compared to the biggest gains from Travel & Leisure and Basic Materials. On the macro side, in the euro zone September’s consumer confidence recovered more than expected. In Spain, the government partner UP would be adding pressure to raise the corporate tax in the upcoming budget. In the US, the Fed suggested that the announcement of the end of tapering would come at November’s meeting, finalising by mid 2022 if the recovery continues at the current pace, and leaving the door open to raise rates between 1 and 2 times at the end of 2022. The votes of the Fed members hint at another 3 rate rises in 2023 and 2024. The new macro forecasts show a rise in inflation (4.2% vs. 3.4% previously) and lower growth (4.9% vs. 7.0% prev.). In Brazil, the BoB raised the Selic rate to 6.25% (+100bps), as expected, to contain inflation. In China, Evergrande could be restructured into 3 separate groups.
What we expect for today
European stock markets would see a bullish opening after the Fed message was in line with expectations, still amid doubts on Evergrande after it faced its local debt maturities but without comments on the rest. Currently, S&P futures are up +0.3% (the S&P 500 ended -0.32% lower vs. its price at the closing bell in Europe). Volatility in the US dropped (VIX 20.87). Asian markets are rising (China’s CSI +0.6% and Japan’s Nikkei closed).
Today in the euro zone we will learn the manufacturing and services PMIs and in Spain the final 2Q’21 GDP.