IBERIAN DAILY 13 JULY (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: BANKING SECTOR, EUSKALTEL, SIEMENS GAMESA.MARKETS YESTERDAY AND TODAY
Stock market rally
The positive US opening and the expectations about the 2Q’21 earnings season fuelled European stock markets, which ended with gains despite the initial doubts. Within the Euro STOXX, the best-performing sectors were Utilities and Real Estate whereas Travel&Leisure (hit by the increasing number of cases of the delta variant) and Basic Resources where the only sectors not ending with gains. On the macro side, at the Eurogroup meeting, the EU would have postponed the tax on technology groups to make easier the approval of the 15% minimum global tax although Ireland, Hungary and Estonia continue to be against this measure. In the US, Williams from the Fed outlined that despite the high inflation, it is too soon to initiate the withdrawal of the stimulus measures. In China, June’s exports and imports rose more than expected. As for Covid-19, the FDA warned about autoimmune disorders with the J&J vaccine, whereas the number of new cases shows the largest weekly increase since Apr’20.
What we expect for today
The European stock markets would open with slight gains awaiting the release of macro data and business results in the US. Currently, S&P futures are down -0.05% (the S&P 500 ended up +0.13% vs. its price at the closing bell in Europe). Volatility in the US fell (VIX 16.17). Asian markets are trading with mixed results (China’s CSI -0.3% and Japan’s Nikkei +0.54%).
Today in Germany and France we will learn June’s final inflation, in the US, June’s inflation. In debt auctions: Spain (€ 2.5 Bn in 3 & 9 M t-bills), Holland (€ 2.3 Bn in bonds due 2042), Italy (€ 9 Bn in bonds due 2024, 2028 and 2037) and Germany (€ 5 Bn in bonds due 2023). In US business results, we highlight JP Morgan, Goldman Sachs and Pepsico.
COMPANY NEWS
SIEMENS GAMESA, SELL
The US Govt. will place tariffs on sales in the US of wind towers coming from Spain. This news confirms the comments made by the US International Trade Administration in April that European wind tower component manufacturers, and specifically Spanish ones, were selling in the country below cost. The Intl. Trade Commission placed requirements on large sector companies and decided to set a 73% tariff on the selling price last April on a preliminary basis, and after no response was received the tariff is now definitive.
In our coverage universe the company most affected is SGRE, but other companies with some impact are Vestas, Acciona Windpower (Nordex), Haizea Wind Group and Windar.
Although the US authorities’ investigation and the tariffs threat were already known, now that the resolution is firm, this is negative news for SGRE, as the US market represented 21% of the company’s order intake in 1Q’21 (18% in 2020).
Euskaltel SA is a Spain-based company engaged in the provision of integrated telecommunication services. The Company's activities are divided into three segments: Residential, Business, as well as Wholesale and Other. The Residential segment provides fixed and mobile telecommunication services, broadband and wireless Internet, as well as digital television (TV) as a single service and in packages. The Business division primarily offers fixed and mobile telephony, as well as Internet access for enterprises. The Wholesale and Other area serves wholesale customers and is responsible for the delivery of communication services, such as infrastructure leasing, information technology (IT) outsourcing, as well as sell of installation material and electronics. The Company operates in the Basque Country, Spain.
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