EUR 100.00 For Business Accounts Only

IBERIAN DAILY 20 AUGUST (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: IAG.

European stock markets outperform US counterparts
Yesterday European stock markets once again performed well, widening the outperformance gap with the S&P 500 in this second half of the month. In the STOXX 600, the sectors rising the most were Autos, Consumer Goods and Chemicals (all more than +2.0%), compared to Real Estate, which was the only sector closing in the red, and the cyclicals Industrials and Energy (dragged down by the Brent rout), which rose the least. On the macro front, July’s housing starts beat expectations, whereas building permits fell more than expected. The Secretary of the Treasury, Scott Bessent, expects stablecoins to lead to strong demand for public debt. In Japan, July’s machinery orders recovered more than expected, while July’s exports contracted more than expected, translating into an unexpected trade deficit. In China, as expected, the PBoC kept the reference interest rate for 1Y and 5Y loans unchanged at 3.0% and 3.5%, respectively. On the geopolitical front, Putin warned that a possible meeting with Zelensky should be well planned, while Switzerland has offered to host said meeting, although according to the press (Político), the US Govt. would be considering Budapest. Moreover, in case of a peace deal, the US would be willing to provide air support, and another 10 countries would also take care of security. In US business results, Medtronic was in line with expectations and Home Depot released disappointing earnings.
What we expect for today
European stock markets would open with losses of around -0.5%. Currently, S&P futures are -0.3% lower (the S&P 500 ended -0.3% lower vs. the European closing bell). Asian markets are mixed (China’s CSI 300 +0.3% and Japan’s Nikkei -1.5%).
Today in the UK and euro zone we will learn July’s final inflation. In US business results, Target, Estee Lauder and Lowe, among others, will release their earnings.