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IBERIAN DAILY 01 SEPTEMBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: IBERDROLA, SANTANDER.

Stock markets ended August with gains
Last week the main European stock markets closed with drops >-2.0% due to the political doubts in France (a confidence vote could end with the current PM) and renewed trade tensions in the US, China and India. In the STOXX 600, Consumer Goods and Energy led the gains, whereas Banks, Construction and Chemicals recorded the biggest drops. On the macro side, in Germany, July’s retail sales fell more than expected whereas inflation rose more than expected to 2.2% YoY and unemployment provided a positive surprise, with the unemployment rate at 6.3%. In Spain, August’s inflation came in below expectations, with the YoY data remaining at the previous level of 2.7% and the core data rising to 2.4%. In the US, personal outlays were in line with expectations, as well as the consumption deflator whereas August’s Chicago PMI and the University of Michigan confidence came in below expectations. In China, the manufacturing and services PMI rose less than expected in August. On the trade font, a US appeals court has ruled that most tariffs issued by Donald Trump are illegal but they will remain in force at least until the 14th of October’25 to offer time to the administration to appeal.
What we expect for today
European stock markets would open with slight gains of +0.25%. Currently, S&P futures are flat (the S&P 500 ended +0.1% higher vs. the European closing bell). Asian markets are mixed (China’s CSI 300 +0.4% and Japan’s Nikkei -1.6%).
Today is a holiday in the US. In Germany and Spain we will learn August’s manufacturing PMI. In France the government will initiate contacts for the confidence vote.