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IBERIAN DAILY 14 OCTOBER + 3Q’22 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: IAG, NATURGY, RESULTS PREVIEWS.

Stock markets manage to recover from core inflation at a high
The disappointing inflation data for September in the US once again brought global markets down into the red, although they managed to recover at the end of the session thanks to rumours that Russia is open to talks. In the Euro STOXX, the best-performing sectors were Energy and Banks vs. Consumer Goods and Food, which closed with the biggest drops. On the macro side, in Germany September’s final inflation data confirmed the 10% YoY figure, a high since the country’s reunification. In this regard, from the ECB, J. Nagel (Bundesbank, hawkish) was in favour of raising rates and beginning to reduce the balance sheet in 2023 in order to fight high inflation. Meanwhile, according to Reuters, the ECB staff models estimate a terminal interest rate of 2.25% to reduce inflation (vs. the market’s 3.0%), especially if we consider the possible balance sheet reduction. Separately, the UK Govt. would be studying the possibility of cancelling the fiscal plan. In the US, inflation (8.2% YoY) fell less than expected in September, whereas the core figure (6.6%) rose more than expected, reaching a 40-year high and driven by services (housing cost suggests more increases in the short term). Meanwhile, weekly jobless claims rose slightly more than expected. In China, September’s inflation rose in line with expectations to 2.8% YoY (core figure falling), while production prices slowed more than expected. Separately, the Governor of the PBoC reiterated in the G20 meeting that pressure will be put on banks to increase lending for infrastructure, manufacturing and real estate. Lastly, the Govt would be considering extending the Zero Covid policy until next spring. In US business results, Blackrock beat expectations and Domino’s Pizza released disappointing earnings.
What we expect for today
The European stock markets would open with gains of up to +2.0%, fuelled by cyclical stocks. Currently, S&P futures are up +0.7% (the S&P 500 ended +1.25% higher vs. the European closing bell). Volatility in the US fell (VIX 31.94). Asian markets are rising (China’s CSI 300 +2.7% and Japan’s Nikkei +3.3%).
Today in Spain we will learn September’s final inflation and in the US September’s production prices and retail sales, as well as October’s University of Michigan consumer confidence. In US business results, JP Morgan, US Bancorp, Wells Fargo, Morgan Stanley and Citigroup, among others, will release their earnings.


COMPANY NEWS

3Q’22 Results highlights and rest of previews
Along with our daily report we include 3Q’22 results forecasts with all the previews for next week in Spain with our qualitative opinion and the expected impact on the market. Of the stocks releasing their results over the coming days we highlight on the positive side Bankinter (20/10), where we expect a very positive performance in all headlines that will likely result in a guidance upgrade, and on the Negative side Vidrala (21/10), with lower margins (as the company failed to pass the rise in the cost of gas onto clients).