IBERIAN DAILY 16 MAY (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: ELECTRICITY SECTOR, IBERDROLA.Turkey, another source of uncertainty
The main European stock markets posted losses awaiting advances in the US debt ceiling negotiations (new talks today) and the election result in Turkey, where the second round of voting (28 May) will decide the presidency between Erdogan and Kilicdaroglu. As for sectors, Travel & Leisure and Real Estate rose the most, with Retail and Food the worst performers. On the macro side, in the euro zone we learned March’s industrial output, which came in far below expectations. In the US, May’s Empire index fell sharply to -31.8 vs. -3.9 expected. Raphael Bostic (Atlanta Fed) and Austan Goolsbee (Chicago Fed) were in favour of halting rate hikes, whereas T. Barkin (Richmond Fed) left the door open to more hikes if inflation does not fall enough. In Spain, the EC raised its GDP growth forecast for 2023 to 1.9%, driven by recovery to private consumption, and that of 2024 to 2.0%; it expects inflation to stand at 4.0% this year and 2.4% next year. In China, both industrial output and retail sales for April rose less than expected.
What we expect for today
The European stock markets would see a slightly bearish opening, dragged down by the disappointing activity data in China. Currently, S&P futures are down -0.20% (the S&P 500 ended up +0.21% vs. the European closing bell). Volatility in the US rose (VIX 19.20). Asian stock markets are mixed (China’s CSI 300 -0.14%, Japan’s Nikkei +0.83%).
Today in the US we will learn April’s retail sales and industrial output, in the euro zone preliminary 1Q’23 GDP, and in Germany May’s ZEW index. In debt auctions: Germany (€ 4 Bn in bonds due 2033).
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.
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