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IBERIAN DAILY 20 SEPTEMBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: GRIFOLS, MINOR HOTELS, VISCOFAN.

The market and mainly cyclical stocks welcome the Fed’s decision
European stock markets climbed significantly yesterday despite the appreciation of the euro, remaining confident that the Fed will enable a soft landing of the US economy. Thus, in the STOXX 600 cyclical stocks severely and recently hit such as Technology and Basic Resources were the best performers whereas Utilities and Telecoms posted the biggest drops. On the macro side, in the UK, the BoE kept interest rates unchanged at 5.0% (8 votes vs. 1), extending the bond reduction plan for one year by additional ~ 100 Bn. At the conference, the governor A. Bailey suggested a gradual flexibilization of the monetary policy and many members were in favour of the existence of a favourable scenario to start cutting rates. In the US, weekly jobless claims fell more than expected and September’s Philadelphia Fed index improved more than expected, returning to positive territory. Lastly, August’s existing home sales came in below expectations. As for the presidential race, the candidates D. Trump and K. Harris are facing a tight race and the final decision will depend on the victory in the states of Arizona, Georgia, Michigan, Nevada, North Carolina and Wisconsin. In Japan, the BoJ kept the benchmark rate unchanged at 0.25%, as expected, being more optimistic about private consumption. Meanwhile, August’s inflation rose in line with expectations, foreseeing new rises due to the elimination to energy subsidies. In China, as expected, the BBoC kept the 1 & 5Y loan benchmark rates unchanged.
What we expect for today
Stock markets would open with drops of -0.40%. Currently, S&P futures are down -0.11% (the S&P 500 ended +0.10% higher vs. the European closing bell). Asian markets are mixed (China’s CSI -0.60% and Japan’s Nikkei +1.84%).
Today in the UK we will learn August’s retail sales and in the euro zone the consumer confidence.