IBERIAN DAILY 11 OCTOBER (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: CAIXABANK, ELECTRICITY SECTOR, FCC, RED ELÉCTRICA, RESIDENTIAL PROPERTY DEVELOPERS.MARKETS YESTERDAY AND TODAY
Doubts remain
The worse US employment data and another rise in oil and gas prices continued to pressure European stock markets. In general, some pressure on salaries has been seen, which along with energy costs and distortions along the supply chain, back a less accommodative monetary policy. Even so, during the week the Euro STOXX ended with gains, with Banks and Energy standing out (after oil consolidated at US$ 80/barrel), whereas Travel & Leisure and Real Estate rose the least. On the macro side, the OECD has agreed on a global minimum corporation tax of 15% starting in 2023. In Germany August’s trade balance saw its surplus fall more than expected. In the euro zone, the EC would be seeking ways to reinforce control of foreign bank branches. In the UK, M. Saunders and A. Bailey of the BoE suggested rate hikes to contain inflation. In Brazil, September’s inflation rose slightly less than expected, but still reaching 10.3%. In the US, “only” 194,000 new jobs were added in September, far below expectations, although the unemployment rate fell to 4.8% (the poor data could justify tapering), and August’s final wholesale inventories were in line with expectations. In Japan, PM F. Kishida denied the introduction of a tax on capital gains.
What we expect for today
European stock markets would open quite stable, near current resistance levels with the Tech sector performing the best. Currently, S&P futures are down -0.1% (the S&P 500 ended -0.14% below its price at the closing bell in Europe). Volatility in the US dropped (VIX 18.77). Asian markets are rising (China’s CSI +0.58% and Japan’s Nikkei +1.44%).
Today, there are no relevant macro releases. In debt auctions: Germany (€ 4 Bn in 6M t-bills) and France (€ 5.4 Bn in 3M, 6M and 12M t-bills).
Caixabank is an investment company based in Spain. Co. is involved in investment portfolio management activities across two areas: Services and Financial Business and Insurance. In the services area, Co. provides investment solutions for companies involved in the infrastructure, energy, services and entertainment sectors. In the financial business and insurance area, Co. is engaged in the investments for international banks, insurance and specialist financial services. Co. focuses most of its banking investments in India, China, the U.S., and Central and Eastern Europe with a particular interest in retail banking. Co. is also involved in the disinvestments activities.
Fomento de Construcciones y Contratas is the parent company of a group engaged in sanitation services, cleaning, maintaining, purification and distribution of water, construction of highways, hydraulic works, marine works, air and rail transport infrastructure, urban developments, housing, non-residential buildings, office buildings, toll highways, parking garages, marinas and water treatment plants. Co. is also engaged in the manufacture and sale of cement and cement infrastructures, such as precast concrete elements; and in the financial markets, and real estate development, leasing and tourism.
Red Electrica is engaged in the transmission of electrical energy, the operation of the system and the management of the transmission network in the Spanish electricity system. In addition, through its subsidiaries, Co. is engaged in the acquisition, holding and management of foreign securities, co-ordination of international exchanges, provision of telecommunications services for third parties, provision of consultancy, engineering and construction services outside the Spanish electricity system, securing of funds, carrying out of financial transactions and provision of financial services.
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