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IBERIAN DAILY 04 SEPTEMBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: GRIFOLS, IBERDROLA.

New doubts on the horizon
The main indices saw profit taking in early September, one of the worst months of the year for stock markets from a statistical standpoint, to some extent exhausted following the rally seen since the 5th of August. Thus, in the STOXX 600, defensive sectors such as Household and Food were the best performers whereas cyclical industries with high beta such as Basic Resources and Energy (weak demand and possible end to the disputes that halted production in Libya) posted the biggest drops. On the macro side, in Spain, the number of unemployed rose slightly less than expected in August’s but social security affiliation fell by almost 200,000 people, the worst summer in the last 5 years. On the political front, J.L. Escrivá (current Minister for Digital Transformation) would be appointed by the government as BoS governor. In Germany, the government would be studying the possibility of reducing the stake in Commerzbank. In the US, August’s non-manufacturing ISM improved slightly less than expected although the price sub-index climbed significantly (to 54.0 from 52.9 prev.), with a low probability of seeing a -50bps rate cut at the Fed’s next meeting. On another note, construction spending slowed down again in July unexpectedly. In Brazil, the 2Q’24 grew more than expected to 3.3% YoY vs. 2.5% previously. In China, Caixin services PMI dropped slightly more than expected in August. On the business front, Nvidia was summoned by the Justice Department in an investigation on monopoly.
What we expect for today
Stock markets would open with drops of as much as -1.5%, from where they could rally throughout the session following the sharp drops seen yesterday in the US, mainly in the Nasdaq where NVIDIA slid -9.5%. Currently, S&P futures are down -0.49% (the S&P 500 ended -0.64% lower vs. the European closing bell). Asian markets are sliding (China’s CSI -0.58% and Japan’s Nikkei -4.39%).
Today in the euro zone we will learn August’s final services PMI, in Brazil July’s industrial output and in the US July’s factory orders, July’s job vacancies (JOLTS) and September’s Fed Beige Book.