IBERIAN DAILY 14 OCTOBER (ANÃLISIS BANCO SABADELL)
NEWS SUMMARY: BBVA, FERROVIAL, GRIFOLS, IBERDROLA, MEDIASET ESPAÑA, OHL, TELEFÓNICA.MARKETS YESTERDAY AND TODAY
Trade talks lead to rallies
The reduced trade tensions after Trump’s optimistic tweets, later confirmed by a constructive meeting between the US President and the Chinese delegation drove stock markets upwards. Almost all the sectors in the Euro Stoxx posted gains, with Technology and Banks leading the way, whereas Media and Consumer Goods fell the most. On the macro side, in the UK B. Johnson and M. Barnier are closer to an agreement, which will lead to more intense negotiations this week to define whether an agreement will be reached before 31/10 or if the UK must request another extension until 31/10/2020, although the latter cooled expectations of an agreement, whereas the PM’s allies distanced themselves from the plan presented. From the ECB, Draghi admitted the harmful effects of negative interest rates on some sectors. In the US, September’s import prices rose +0.2% vs. the expected drop, and October’s preliminary U. of Michigan consumer confidence improved unexpectedly. From the Fed, N. Kashkari backed an additional rate cut if the downturn in macro data continues. Lastly, the US and China agreed in areas like agriculture, intellectual property rights and FX, although they did not go into detail, but enough for the US to cancel the tariff hikes expected for October of 25% to 30% on US$ 250 Bn worth of goods. Separately, the Fed announced the purchase of US$ 60 Bn of t-bills per month through 2Q’20. In China, both imports and exports fell more than expected in September, reflecting the weakness of internal demand.
What we expect for today
The markets would open with profit-taking following Friday’s rally. Currently, S&P futures are up +0.08% (the S&P 500 was down -0.47% vs. its price at the closing bell in Europe). Volatility in the US fell (VIX 15.58%). The Asian markets that are open are rising (Hong Kong +0.98%).
Today in the euro zone we will learn August’s industrial output. In debt auctions: Germany (€ 3 Bn in 6M t-bills) and France (€ 4.5 Bn in 3M, 6M and 12M t-bills).
Banco Bilbao Vizcaya Argentaria is an international financial group, engaged primarily on providing banking services and consumer finance to private individuals and businesses in Spain and Portugal; providing real estate activity in Spain; providing services to international companies and investment banking, capital markets and treasury management services to clients; and providing the banking, insurance and pension businesses in Mexico and the U.S., as well as in South America.
Ferrovial is a transportation company based in Spain. Co. is engaged in operations in the transportation sector. Co. specializes in the design, construction, management, administration and maintenance of transport infrastructures. Co.'s services range also includes the maintenance of parking lots, and land-, sea- and air-based transport networks. Co. is also engaged in the promotion and operation of short-stay parking lots, parking regulation and management services and promotion and sale of residents' parking.
Iberdrola is a holding company. Through its subsidiaries, Co. operates in four segments: network business, which includes all the energy transmission and distribution activities, and other regulated activity originated in Spain, the U.K., the U.S. and Brazil; deregulated business, which includes electricity generation and sales businesses as well as gas trading and storage businesses carried on by Co. in Spain, Portugal, the U.K. and North America; renewable business, with activities related to renewable energies in Spain, the U.K., the U.S. and the rest of the world; and other businesses, including the engineering and construction businesses and the non-power businesses.
Gestevision Telecinco is a television network company based in Spain. Co. heads a group of dependent companies, which form the Telecinco Group. Through its subsidiaries, Co. is engaged in the management and commercial exploitation of a television network. Co.'s television network acquires, produces, and distributes audiovisual content. Co. also sells the network advertising airtime, carried out by its subsidiary. In addition, Co. is involved in the sale of other advertising products; production of news programs; the production and sale of audiovisual property rights; and teleshopping.
Obrascon Huarte Lain is an international concession and construction groups based in Spain. Co. maintains significant operations in 30 countries across all five continents. Co. is engaged in hospital and railway construction, transport infrastructure concessions, oil and gas, energy, solids handling and fire protection systems and international contracts. Co.'s operations are organized along four divisions: OHL Concesiones, OHL Construccion, OHL Industrial y OHL Desarrollos. Co. is also engaged in real state project developments of mixed use managed by the international hotel chains.
Telefonica is engaged in the provision of public or private telecommunications services, including ancillary or complementary telecommunications services or related services. Co.'s fixed business includes: traditional fixed telecommunication services, Internet and broadband multimedia services, data and business-aplications services, and wholesale services for telecommunication operators. Co. also provides a range of mobile and related services and products to consumer and business customers, including mobile voice services, value added services, mobile data and Internet services, wholesale services, corporate services, roaming, fixed wireless, and, trunking and paging.
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