EUR 100.00 For Business Accounts Only

IBERIAN DAILY 03 MARCH (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: IAG, MÁSMÓVIL.

MARKETS YESTERDAY AND TODAY

Volatility drops from highs
European stock markets ended up rallying after the solid opening in the US, where the S&P500 ended up rising more than 4.0%. In the Euro Stoxx, the best performing sectors were Utilities and Consumer Goods, whereas Banks and Media recorded the biggest losses. On the macro side, in the euro zone, February’s final manufacturing PMIs was raised slightly, rising in Germany, France and Spain, and we expect drops in March due to the coronavirus. In this regard, the OECD lowered its growth estimates for 2020 to 2.4% (-0.5pp), delaying recovery to 2021 in a scenario of a moderate impact from the virus. For Europe it expects 0.8% growth (-0.3pp). From the ECB, Luis de Guindos suggested a euro at around 1.1000. In the US, February’s manufacturing ISM fell slightly more than expected due to the drop in orders, although it remains above 50. Separately, Trump once again called for rate cuts. In US business results, Dentsply came in worse than expected and Evergy was in line.
What we expect for today
European markets would open with gains of +0.5%. Currently, S&P futures are down -0.25% (the S&P 500 closed +1.76% above its price at the closing bell in Europe). Volatility in the US fell (VIX 33.42%). The Asian markets that are open are trading with mixed results (Japan -1.22% and Hong Kong +0.09%).
Today the G7 will have a teleconference regarding the coronavirus. In the euro zone we will learn February’s preliminary inflation. In US business results, Autozone, HP and Kohl’s, among others, will release their earnings. In debt auctions: Spain (€ 5 Bn in 6M and 12M t-bills) and Germany (€ 500 M in I/L bonds due 2030 and 2036).