IBERIAN DAILY 12 JULY (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: COLONIAL, ELECTRICITY SECTOR, ENAGÁS.Recession fears continue to weigh on stock markets
The increasing number of Covid cases in China, along with the fines imposed to large technology groups (Alibaba and Tencent) for failing to meet the antimonopoly regulation, and the European energy crisis, dragged down stocks markets. Thus, in the Euro STOXX, most sectors saw drops, led by Automobiles and Travel&Leisure vs. the best relative performance of defensive sectors, such as Utilities and Telecoms. On the macro side, in the Eurogroup meeting was marked by the possible definitive interruption of gas supply from Russia (Nord Stream 1 should resume on the 21st of July) and investments in renewables were recommended instead of fiscal stimulus in the framework of the emergency plan to control gas supply, expected to be made public on 26/07 in an extraordinary meeting (meanwhile Germany would change to a more restrictive phase due to doubts on gas supply, with the priority of households and hospital vs. industry). Additionally, a shift toward debt sustainability has been suggested to the detriment of the support of demand to avoid further damage of inflation. On another note, the EC stated it will cut its growth forecasts for the euro zone while it will raise its inflation estimates. In the US, the start of the 2Q’22 earnings session is a source of concern in view of the appreciation of the dollar and the high internal costs. From the Fed we saw mixed comments, R. Bostic stated that the US economy could face rate rises whereas E. George warned that the rapid tightening could be counterproductive.
What we expect for today
European stock markets would see a bearish opening with drops >-0.5% with Technology and other cyclical sectors being more penalized. Currently, S&P futures are down -0.5% (the S&P 500 ended virtually flat vs. the European closing bell). Volatility in the US dropped (VIX 26.17). Asian markets are falling (China’s CSI 300 -0.46% and Japan’s Nikkei -1.86%).
Today, we will learn in Germany the ZEW index. Also the Ecofin will hold its meeting. In debt auctions: Germany (€ 5 Bn in bonds due 2024).
Enagas is a gas transportation company based in Spain. Co. is engaged in the technical distribution and storage of gas through pipelines as well as the provision of regasification services. Co. and subsidiaries are engaged in the ownership, administration, storage, pipeline transportation, distribution flow, and sale of natural gas. As a transport company, Co. also provides gas and manages the gas infrastructures.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.