Report
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MARKETS YESTERDAY AND TODAY
US economy: healthier than it appeared
First China’s announcement that it will reduce tariffs on some US farm imports (reflecting the advances made in trade talks) and the stronger US employment data than expected boosted all risk assets, and stock markets in particular. In the Euro Stoxx, Technology and Retail had the biggest gains, with Pharma and Telecoms posting the worst relative performance (but still with gains). On the macro side, in Germany October’s industrial output saw its biggest drop in 10 years. In the US, employment data easily beat expectations with the creation of 266,000 new jobs in November, with the unemployment rate falling to 3.5% and average hourly wages also growing slightly more than expected to 3.1. The University of Michigan consumer confidence index also came in above expectations, and only wholesale inventories grew slightly less than expected. This morning in Japan the 3Q’19 GDP grew more than expected, and in China November’s exports rose less than expected (reflecting the impact from the tensions with the US), but imports rose unexpectedly, showing that internal demand remains somewhat dynamic.
What we expect for today
The markets would open with slight drops pending more signs of whether the US will impose new tariffs on China on the 15th of December. Currently, the S&P 500 ended -0.1% below its price at the closing bell in Europe. Volatility in the US dropped (VIX 13.62%). Asian markets are climbing slightly (Japan +0.3% and Hong Kong +0.07%).
Today in Germany we will learn October’s trade balance and the euro zone December’s Sentix index.
COMPANY NEWS
GRIFOLS. More reasons to believe in AMBAR. We raise the probability of success to 70% and change our recommendation to BUY.
Following the release of the complete AMBAR study (phase III/2b for Alzheimer’s), confirming the efficacy levels with new neuroimaging data and the company’s push to obtain regulatory approval from the FDA as well (which it will involve in the design and clinical development of the new trials), we raise the probability of success of AMBAR up to 70% (vs. previous 20%), raising our T.P: +23% to € 37.30/sh. (+22% upside) and changing our recommendation to BUY. Despite the rise YtD (+24% vs. the IBEX), the downside risks to our valuation are small, even without including AMBAR (our T.P. excluding AMBAR would be € 28.75/sh., only -6% below its share price).
IBERIAN DAILY 09 DECEMBER (ANÃLISIS BANCO SABADELL)
NEWS SUMMARY: GRIFOLS, IAG.MARKETS YESTERDAY AND TODAY
US economy: healthier than it appeared
First China’s announcement that it will reduce tariffs on some US farm imports (reflecting the advances made in trade talks) and the stronger US employment data than expected boosted all risk assets, and stock markets in particular. In the Euro Stoxx, Technology and Retail had the biggest gains, with Pharma and Telecoms posting the worst relative performance (but still with gains). On the macro side, in Germany October’s industrial output saw its biggest drop in 10 years. In the US, employment data easily beat expectations with the creation of 266,000 new jobs in November, with the unemployment rate falling to 3.5% and average hourly wages also growing slightly more than expected to 3.1. The University of Michigan consumer confidence index also came in above expectations, and only wholesale inventories grew slightly less than expected. This morning in Japan the 3Q’19 GDP grew more than expected, and in China November’s exports rose less than expected (reflecting the impact from the tensions with the US), but imports rose unexpectedly, showing that internal demand remains somewhat dynamic.
What we expect for today
The markets would open with slight drops pending more signs of whether the US will impose new tariffs on China on the 15th of December. Currently, the S&P 500 ended -0.1% below its price at the closing bell in Europe. Volatility in the US dropped (VIX 13.62%). Asian markets are climbing slightly (Japan +0.3% and Hong Kong +0.07%).
Today in Germany we will learn October’s trade balance and the euro zone December’s Sentix index.
COMPANY NEWS
GRIFOLS. More reasons to believe in AMBAR. We raise the probability of success to 70% and change our recommendation to BUY.
Following the release of the complete AMBAR study (phase III/2b for Alzheimer’s), confirming the efficacy levels with new neuroimaging data and the company’s push to obtain regulatory approval from the FDA as well (which it will involve in the design and clinical development of the new trials), we raise the probability of success of AMBAR up to 70% (vs. previous 20%), raising our T.P: +23% to € 37.30/sh. (+22% upside) and changing our recommendation to BUY. Despite the rise YtD (+24% vs. the IBEX), the downside risks to our valuation are small, even without including AMBAR (our T.P. excluding AMBAR would be € 28.75/sh., only -6% below its share price).
Underlyings
Grifols (GRF SM)
International Consolidated Airlines Group SA
International Airlines Group is an international scheduled airline and global premium airlines. Co.'s principal place of business is London with significant presence at Heathrow, Gatwick and London City airports.
Provider
Sabadell
Research Department
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