EUR 100.00 For Business Accounts Only

IBERIAN DAILY 02 JULY (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ALMIRALL, CAIXABANK, IBERPAPEL, NEINOR HOMES, TOURISM SECTOR.

MARKETS YESTERDAY AND TODAY

The Ibex recovers as the S&P 500 continues to hit new highs
Another market rally thanks to the recovery of Brent crude prices after OPEC+ decided to delay until today its decision of an additional increase to crude production over the coming months (they would be negotiating an increase of around +400,000 b/d per month between August and December and extending the quota agreement until 2022) and the softening of restrictions on movement in the United Kingdom (B. Johnson has justified this with the control of mortality) backed a new market rally. Within the Euro STOXX, almost all sectors posted gains, led by Travel & Leisure and Energy, vs. Technology, which fell by -0.7% and Financial Services, which closed virtually flat. On the macro side, in the Euro zone, June’s final manufacturing PMI beat the preliminary figure, rising to 63.4, improving in Spain, France and Germany. Overall, it hints at growth higher than the consensus’ 12.9% YoY estimate for 2Q’21. In the US, the weekly jobless claims fell more than expected, whereas May’s construction spending contracted unexpectedly. Meanwhile, June’s ISM non-manufacturing index fell somewhat more than expected, with the prices subindex rising sharply (92.1%), whereas employment remained at relatively low levels (49.9). The IMF warned that the Fed will have to raise interest rates in late 2022 or early 2023 due to the strong recovery. Lastly, the proposal of a minimum 15% corporation tax was backed by 130 countries, and it could be implemented in 2023, although Ireland, Estonia and Hungary did not sign the agreement.
What we expect for today
European stock markets would open with slight gains, with value outperforming growth. Currently, S&P futures are up +0.05% (the S&P 500 ended up +0.22% vs. its price at the closing bell in Europe). Volatility in the US decreased (VIX 15.48). Asian markets are trading with mixed results (China’s CSI -2.7% and Japan’s Nikkei +0.2%).
Today we will learn in Spain June’s unemployment data, in the Euro zone May’s industrial production prices and in the US non-farm employment, wage returns and June’s unemployment rate.

COMPANY NEWS

CAIXABANK, BUY
After yesterday’s closing bell CABK announced the agreement with the unions for the personnel restructuring plan under way, which will mean the lay-off of 6,452 employees (~12% of the workforce), with some € 1.9 Bn of associated costs, meaning an impact of -90bps on the CET1 ratio (vs. 13.1% on 1Q’21) and that will be accounted in 2Q’21. The bank has confirmed that the synergies stemming from the deal will be a minimum of € 770 M, in line with what was announced previously, and that FL CET1 will be above 12%, including all the impacts from the merger. Note that the restructuring costs announced will total €~2.4 Bn, of which the aforementioned € 1.9 Bn are assigned to the layoff plan, meaning a 2.5x payback, which is lower than other adjustments the bank has made.
Expected news, although positive, as the communiqué hints that the synergies to be obtained could be higher than initially announced.