IBERIAN DAILY 05 AUGUST + 2Q’22 RESULTS PREVIEWS (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: IAG, IBERDROLA.At the end of today’s report, and during the entire results season, we will include a presentation with previews for the 2Q’22 results to be released over the coming days in Spain.
BoE sees risk of recession in 2023
Despite a bullish market opening, the message from the BoE (recession risk in 2023 and very high inflation) cooled gains. Within the Euro STOXX, the best-performing sectors were Travel & Leisure and Retail, whereas Real Estate and Media saw the day’s biggest losses. On the macro side, in Germany, factory orders contracted somewhat less than expected in June. In Europe, the minutes of the ECB’s latest meeting showed a slowdown in growth and confirmed further rate hikes in the coming months, although their intensity will depend on the macro data. Separately, the TPI anti-fragmentation tool was defended as necessary to ensure the correct transmission of monetary policy. In the United Kingdom, the BoE agreed to a +50bps rate hike (as expected), leaving the benchmark interest rate at 1.75%. Although activity is expected to decline in 2023, high inflation will lead to new rate hikes and the beginning of balance sheet reduction as from September at a pace of £ 10 M per quarter. In the US, weekly jobless claims increased slightly, in line with expectations, and June’s trade balance saw a deficit reduction, as expected. On the geopolitical front, the government condemned the launch of Chinese missiles near Taiwan. In Mexico, consumer confidence fell unexpectedly in July. In US business results, Warner and Motorola came in better than expected, ConocoPhilips and WestRock were in line, and Kellogg worse.
What we expect for today
The European stock markets would see a bullish opening, with better performance by the technology sector and awaiting the employment data in the US. Currently, S&P futures are up +0.25% (the S&P 500 ended +0.1% higher vs. the European closing bell). Volatility in the US fell slightly (VIX 21.44). Asian markets are mixed (China’s CSI 300 -0.2% and Japan’s Nikkei +0.7%).
Today we will learn in Germany and Spain June’s industrial output, in Mexico May’s fixed investment, and in the US non-farm employment, the unemployment rate and July’s wage earnings. In US business results, Western Digital and Consolidated Edison, among others, will release their earnings.
Iberdrola is a holding company. Through its subsidiaries, Co. operates in four segments: network business, which includes all the energy transmission and distribution activities, and other regulated activity originated in Spain, the U.K., the U.S. and Brazil; deregulated business, which includes electricity generation and sales businesses as well as gas trading and storage businesses carried on by Co. in Spain, Portugal, the U.K. and North America; renewable business, with activities related to renewable energies in Spain, the U.K., the U.S. and the rest of the world; and other businesses, including the engineering and construction businesses and the non-power businesses.
International Airlines Group is an international scheduled airline and global premium airlines. Co.'s principal place of business is London with significant presence at Heathrow, Gatwick and London City airports.
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