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IBERIAN DAILY 01 NOVEMBER + 3Q'22 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: CONSTRUCION SECTOR, FERROVIAL.

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 3Q’22 results to be released over the coming days in Spain.

Inflation remains relentless
Most of the world’s stock markets ended October with gains (except for China), with the Ibex nearing 8,000 points after having risen by around +8%. Thus, the week got off to a good start for the European stock exchanges, with Energy and Travel & Leisure being the best-performing sectors within the Euro STOXX, vs. Retail and Basic Resources, which were the worst relative performers. On the macro side, in the Euro zone, October’s inflation climbed above expectations to 10.7% YoY (affected mainly by the rise in energy prices), with core inflation rising as expected to 5.0% YoY. 3Q’22 GDP slowed to +3.1%, as expected. In Spain, retail sales fell in line with expectations. In Japan, October’s final manufacturing PMI confirmed the preliminary data of 50.7, the slowest expansion pace in the past 21 months. In China, October’s Caixin manufacturing PMI climbed more than expected but remaining below growth zone. In Asia, factory production weakened in October amid fears of global recession and the zero-Covid policy in China, with activity in South Korea, Taiwan and Malaysia slowing down. In Australia, the RBA raised interest rates by 25bps, as expected. In US business results, Emeron Electric and On Semiconductor came in above expectations, and Global Payments below.
What we expect for today
European stock markets would open with gains following the positive performance of Asia, awaiting the Fed meeting to be held tomorrow. Currently, S&P futures are up +0.5% (the S&P 500 ended -0.25% lower vs. the European closing bell). Volatility in the US rose (VIX 25.88). Asian markets are climbing (China’s CSI 300 +3.1% and Japan’s Nikkei +0.3%).
Today we will learn in the US October’s ISM manufacturing index. In US business results, Pfizer, Sisco, Eli Lilly and Fox, among others, will release their earnings. In debt auctions: Germany (€ 500 M in I/L bonds due 2033 and 2046).