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MARKETS YESTERDAY AND TODAY
Reflation on the markets
It was a session of significant gains in European markets thanks to the expectation of a Democrat victory in the US Senate, with value (and the IBEX 35) leading the way in view of the hope of reflation (higher fiscal spending with a Blue Wave). The disturbances in the US Capitol by some Trump supporters limited some of the advances in US markets, although they finished in positive numbers once the situation was brought under control and the confirmation of Joe Biden as President resumed in Congress. In the Euro STOXX, Banks (curve steepening) and Construction were the best performers, whereas Real Estate and Autos lagged. On the macro side, in Europe December’s final services PMI was slightly disappointing, although despite the lockdown measures introduced, it remained at around 47 (much higher than the lows reached in March/April). In Spain (and as opposed to Italy) December’s services PMI were a positive surprise. Separately, Europe gave the green light to the commercialisation of Moderna’s vaccine. In the US, December’s final services PMI was slightly disappointing, whereas factory orders and durable goods orders for November beat expectations. The ADP employment survey for December was disappointing. The minutes from the last Fed meeting stressed that the organisation would be open to future adjustments to the purchase programme if needed, due to both the pace of purchases and the higher proportion of long-term instruments. This time, 7 of the participants (compared to 5 the previous time) stated that inflation will remain above the 2% target in 2023.
What we expect for today
European stock markets would open with gains after the stabilisation of the situation in Capitol Hill amid hopes of further fiscal stimulus by the Blue Wave. Currently, S&P futures are up +0.5% (the S&P 500 closed -0.6% lower vs. its price at the closing bell in Europe). Volatility in the US dropped (VIX 25%; -1pp). Asian markets are climbing (China +1.1%, Japan 1.5%).
Today in Europe we will learn December’s economic confidence and CPI, November’s retail sales and German factory orders and in the US December’s services ISM. Debt auctions: France (bonds due 2030, 2040, 2052) and Spain (bonds due 2024, 2026, 2050 and I/L 2033).
IBERIAN DAILY 07 JANUARY (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: PRISA.MARKETS YESTERDAY AND TODAY
Reflation on the markets
It was a session of significant gains in European markets thanks to the expectation of a Democrat victory in the US Senate, with value (and the IBEX 35) leading the way in view of the hope of reflation (higher fiscal spending with a Blue Wave). The disturbances in the US Capitol by some Trump supporters limited some of the advances in US markets, although they finished in positive numbers once the situation was brought under control and the confirmation of Joe Biden as President resumed in Congress. In the Euro STOXX, Banks (curve steepening) and Construction were the best performers, whereas Real Estate and Autos lagged. On the macro side, in Europe December’s final services PMI was slightly disappointing, although despite the lockdown measures introduced, it remained at around 47 (much higher than the lows reached in March/April). In Spain (and as opposed to Italy) December’s services PMI were a positive surprise. Separately, Europe gave the green light to the commercialisation of Moderna’s vaccine. In the US, December’s final services PMI was slightly disappointing, whereas factory orders and durable goods orders for November beat expectations. The ADP employment survey for December was disappointing. The minutes from the last Fed meeting stressed that the organisation would be open to future adjustments to the purchase programme if needed, due to both the pace of purchases and the higher proportion of long-term instruments. This time, 7 of the participants (compared to 5 the previous time) stated that inflation will remain above the 2% target in 2023.
What we expect for today
European stock markets would open with gains after the stabilisation of the situation in Capitol Hill amid hopes of further fiscal stimulus by the Blue Wave. Currently, S&P futures are up +0.5% (the S&P 500 closed -0.6% lower vs. its price at the closing bell in Europe). Volatility in the US dropped (VIX 25%; -1pp). Asian markets are climbing (China +1.1%, Japan 1.5%).
Today in Europe we will learn December’s economic confidence and CPI, November’s retail sales and German factory orders and in the US December’s services ISM. Debt auctions: France (bonds due 2030, 2040, 2052) and Spain (bonds due 2024, 2026, 2050 and I/L 2033).
Underlying
Grupo Prisa (PRS SM)
Provider
Sabadell
Research Department
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