IBERIAN DAILY 19 JULY + 2Q’22 RESULTS. PREVIEWS (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: IBERDROLA.At the end of today’s report, and during the entire results season, we will include a presentation with positive and negative results highlights and previews for the 2Q’22 results to be released over the coming days in Spain.
Ibex to get the 8,000 back
The European stock markets started the week with gains of less than +1% following the latest comments from Fed members suggesting that rates will be raised by “only” +75bps at this month’s meeting. Separately, macro slowdown sentiments eased following the PBoC’s commitment to implementing a restrictive monetary policy in a moderate manner. Within the Euro STOXX, the best-performing sectors were last week’s worst performers, Energy and Banks, whereas defensive sectors such as Telecoms and Pharma saw the biggest drops. On the macro side, in Europe, risks of supply cuts increased after Gazprom said it cannot guarantee the supply to three large clients due to force majeure. Meanwhile, the EU has urged member states to immediately cut back on gas use (although it is estimated that only 20% comes from Russia), but Italy would have secured its supply with a contract with Algeria. In Italy, some 5SM legislators are working on a plan to support Draghi’s government, turning their backs on Conte, ahead of the former’s speech in Parliament tomorrow. In the US, July’s NAHB real estate confidence index slowed much more than expected. Moreover, the White House expects the OPEC+ to increase production following J. Biden’s trip to Saudi Arabia. In China, authorities are trying to prevent a confidence crisis in the real estate sector and are considering allowing homeowners a temporary moratorium on mortgage payments without incurring penalties. Separately, Covid-19 is once again a source of concern due to the BA.5 variant, which would be spreading rapidly in the country, increasing the risk of new lockdowns in Shanghai and Tianjin. In US business results, Bank of America disappointed, while Goldman Sachs came in better, although it warned that it could cut jobs (Apple mentioned that new hires would be slowing).
What we expect for today
European stock markets would open with losses after Apple dragged down the Nasdaq technology index after announcing a cut to hiring due to current economic doubts. Currently, S&P futures are up +0.12% (the S&P 500 ended -1.7% lower vs. the European closing bell). Volatility in the US rose (VIX 25.3). Asian markets are mixed (China’s CSI 300 -1.1% and Japan’s Nikkei +0.5%).
Today in the UK we will learn May’s ILO unemployment rate, in the euro zone July’s inflation and in the US housing starts and building permits for June. In US business results, Johnson&Johnson, Novartis, Halliburton, Hasbro and Netflix, among others, will release their earnings. Debt auctions: Germany (€ 4 Bn in bonds due 2027).
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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