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IBERIAN DAILY 03 MAY + 1Q’23 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: CIE AUTOMOTIVE, FLUIDRA, REPSOL.

At the end of today’s report, and during the entire results season, we will include a presentation with positive and negative results highlights and previews for the 1Q’23 results to be released over the coming days in Spain.

US recession fears drag down stock markets
The weekend’s poor activity data in China, the bearish opening of Wall Street, once again dragged down by regional banks, faltering macro data and greater concerns on the US debt ceiling, led the European stock markets to fall throughout the session (with drops of around -1.5%). Within the Euro STOXX, the best-performing sectors were Household Goods, Technology, Leisure and Basic Resources, which ended virtually flat, whereas Energy and Media posted the biggest losses. On the macro side, in the Euro zone, April’s harmonised inflation rose by a tenth to 7% YoY (with core inflation falling by a tenth to 5.6% YoY) as expected, and April’s final manufacturing PMI improved by a tenth vs. the preliminary figure (45.8). In the US, job vacancies fell once again (lower forward pressure on employment), and durable goods orders remained flat vs. February’s data, whereas factory orders recovered less than expected. In US business results, Dupont, Ford, AMD, Starbucks, Marriot and Pfizer came in better than expected, T Rowe Price in line and Prudential released disappointing figures.
In currencies, the euro remained stable below 1.10 against the dollar, with the better macro data in Europe offset by increased risk aversion and the search for safe-haven assets (currently at 1.102). In raw materials, Brent futures further fell to US$ 75.80/barrel amid recession fears (currently at US$ 75.36). Gold rose above US$ 2,000/oz (US$ 2,011/oz) in view of the search for safe-haven assets (currently at US$ 2,015).
In fixed income, US debt tightened sharply (losing all the gains made in Monday’s session) ahead of the Fed meeting amid greater macro concerns and search for safe-haven assets (yields fell across the curve, with the US 10Y bond tightening to 3.42%). In Europe, Germany’s 10Y tightened to 2.26%. In credit derivatives, the liquidation of First Republic Bank led the Sub. Financial index to 200bps from last week’s 188bps. On the primary market we highlight BBVA’s senior preferred bond totaling € 1 Bn with a 2Y call at 4.16%.
What we expect for today
European stock markets would open with gains of around +0.5%, with banks recovering some of the recent losses. Currently, S&P futures are up +0.16% (the S&P 500 ended +0.50% higher vs. the European closing bell). Volatility in the US rose (VIX 17.78). Asian stock markets are closed.
Today in the Euro zone we will learn March’s unemployment rate. In the US, the Fed will hold its meeting (after the European closing bell). Also, we will learn the ADP employment survey and the Services PMI (both for April). In Brazil, the CB will also hold its meeting. In US business results, Estee Lauder, Kraft, Garmin and Metlife, among others, will release their earnings.

COMPANY NEWS

1Q’23 Results highlights and rest of previews
Of the stocks releasing their earnings over the coming days, on the positive side we highlight Sacyr (09/05), where we expect the good operating performance to continue (+30% in EBITDA vs. 1Q’22), with a gradual recovery of margins in Construction that we believe should underpin the share price.