IBERIAN DAILY 24 JANUARY (ANÃLISIS BANCO SABADELL)
NEWS SUMMARY: CAF, NH HOTELES, TALGO.MARKETS YESTERDAY AND TODAY
ECB leaves the door open to easing inflation targets
The markets reacted to C. Lagarde’s speech by falling around -1%. Within the Euro Stoxx, only Utilities and Real Estate closed with gains, benefiting from the tightening in debt markets. By contrast, cyclical sectors with high beta like Autos and Basic Materials fell the most. On the macro side, in the euro zone, the ECB’s meeting brought no surprises, with the monetary policy remaining unchanged (reference rates and € 20 Bn QE in sovereign debt) and an announcement that the review of the monetary strategy will be disclosed at the end of the year, and will include inflation targets, policy tools and communication from the ECB. In the US, December’s leading indicators fell somewhat more than expected, despite November’s data being raised. In Japan, general and core inflation figures for December rose in line with expectations. In China, the cases of coronavirus already total more than 800 (and 25 deaths), leading the Govt. to widen the quarantine to other cities, with some analysts estimating the impact on the Chinese GDP at between -0.5% and -1.0% if another epidemic breaks out (although the WHO has not yet declared an international state of emergency for the virus). In US business results, Intel beat expectations, Procter&Gamble and American Airlines were in line with expectations, with Union Pacific disappointing.
What we expect for today
The markets would recover from yesterday’s drops with gains of around +0.8%. Currently, S&P futures are trading flat (the S&P 500 was up +0.50% vs. its price at the closing bell in Europe). Volatility in the US rose (VIX 12.98%). Asian markets are rising (Japan +0.13% and Hong Kong +0.15%).
Today in the euro zone we will learn January’s preliminary services and manufacturing PMI and in Mexico November’s IGAE economic activity index. In US business results, American Express, among others, will release its earnings.
NH Hotel is engaged in the operation and management of hotels throughout Spain, the Benelux countries, Germany, and South America.
Talgo is engaged in designing, manufacturing, repairing and maintaining the railway rolling stock, as well as the manufacturing, assembling, repairing and maintaining the engines, machinery and parts of the railway systems. Co. has an industrial presence in seven countries: Spain, Germany, Kazakhstan, Uzbekistan, Russia, Saudi Arabia and U.S.A. Co. has an active fleet in Europe, Asia and North America that comprises of 94 high-speed trains and more than 1,400 Talgo tilting passenger cars. Also, Co. purchases, redesigns, constructs, leases and sells all types of real estate.
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