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IBERIAN DAILY 24 JUNE (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACCIONA, ACCIONA ENERGÍA, CAF, FERROVIAL, IAG, IBERDROLA.

Stock markets continue to fall
The sharp tightening in debt markets following the poor preliminary activity data eased drops in early trading in Europe. Thus, the Euro STOXX ended with losses of -1%, with Consumer Goods and Utilities among the few sectors that closed in the black, and Banks and Autos leading the day’s losses. On the macro side, Germany has raised the gas alert and set the emergency plan at level 2 out of 3 (level at which rationing would occur) in view of the risks about winter supplies. In the Euro zone, the services and manufacturing PMIs contracted more than expected in June, and hint at a significant activity slowdown by late 2Q/early 3Q’22. From the ECB, Villeroy and Nagel defended to normalise the monetary policy, although rate hikes will depend on the macroeconomic environment. In the US, June’s preliminary services and manufacturing PMIs fell more than expected to 52.4 and 51.6, respectively, while weekly jobless claims fell less than expected, standing at very low levels. From the Fed, Bowman spoke in favour of a +75bps rate hike in July and subsequent 50bps increases later as long as inflation does not tone down. Powell added nothing new in his second speech. In Mexico, the BdM raised the reference interest rate by +75bps to 7.75%, as expected, whereas April’s retail sales increased more than expected.
What we expect for today
European stock markets would open with gains of as much as +1.0% although with the retail sector hit by Zalando’s profit warning. Currently, S&P futures are up +0.86% (the S&P 500 ended up +0.79% vs. the European closing bell). Volatility in the US increased (VIX 29.05). Asian markets are rising (China’s CSI 300 +0.87% and Japan’s Nikkei +1.22%).
Today we will learn in Spain the 1Q’22 GDP. In the Euro zone, the G7 will hold its meeting. Also we will learn in Germany June’s IFO, in Mexico April’s IGAE economic activity index, and in the US May’s new home sales. In debt auctions: Italy (€ 4 Bn in bonds due 2024).