EUR 100.00 For Business Accounts Only

IBERIAN DAILY 29 JANUARY + 4Q’23 RESULTS. PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: CAIXABANK, ELECTRICITY SECTOR, GRIFOLS, SANTANDER.

At the end of today’s report, and during the entire results season, we will include a presentation with previews for the 4Q’23 results to be released over the coming days in Spain.

Rally ahead of the Fed week
European stock markets ended the week with gains, confident that rate cuts will end up coming sooner rather than later, the resistance of the cycle in the US following the 4Q’23 GDP data and after the promising start to the results calendar. With this in mind, in the STOXX 600 the best-performing sectors were Consumer Goods and Technology, with gains near double digits, whereas Utilities was the only sector ending in the red and Pharma ended with the smallest gains. On the macro side, in the euro zone December’s M3 was a surprise, rising slightly. From the ECB, the Latvian Central Bank head, Kazaks, believes patience is needed before changing monetary policy. In Spain the 4Q’23 unemployment rate improved slightly (unexpectedly), although the number of Social Security registrations fell slightly. In the US, December’s real personal outlays grew much more than expected and ends with highly dynamic private consumption in 4Q’23. On the real estate market, December’s pending home sales rose much more than expected. Lastly, the core PCE index fell to 2.9%, the lowest level since March’21. In China, industrial profits slowed in December, with the YoY rate entering negative territory. Separately, starting today new measures are in place to control short positions on the Chinese stock market. In US business results, American Express released worse earnings than expected, while Colgate Palmolive was in line.
What we expect for today
European stock markets would see a bearish opening despite the increasing probabilities of seeing rate cuts in the US after the latest PCE data. The Fed Funds futures currently price in around -140bps of cuts in 2024 with a 50% probability of starting in March. Currently, S&P futures are down -0.10% (the S&P 500 ended -0.26% lower vs. the European closing bell). Asian stock markets are mixed (China’s CSI 300 -0.57%, Japan’s Nikkei +0.77%).
Today there are no relevant macro data releases. In US business results, Franklin Resources and Whirlpool, among others, will release their earnings.