IBERIAN DAILY 26 JUNE (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: IBERDROLA, SACYR, TALGO.PMIs warn of a possible recession
Widespread sell-offs in view of the signs of lower growth and coordinated tensioning among Central Banks. In the Euro STOXX, all the sectors posted losses on the week, where defensive sectors like Household Goods and Telecoms were the best relative performers, with Real Estate and Basic Resources being the worst performers. On the macro side, in the euro zone, June’s manufacturing PMI fell unexpectedly and the services PMI also fell more than expected. On the whole, both figures show stagnated growth in 2Q’23 vs. 0.1% QoQ expected by the consensus. In Spain, the final 1Q’23 GDP data was raised to 4.2% YoY. In the UK, May’s retail sales rose more than expected. In the US, June’s PMIs were mixed, with the manufacturing index falling and services rising more than expected. From the Fed, Bostic supported the idea of keeping rates at current levels, while Daly thinks two additional rate hikes this year is reasonable, reflecting the current division within the FOMC. On the geopolitical side, Wagner Group’s rebellion ended with an agreement for its exit towards Belarus, after agreeing with President Lukashenko guarantees to avoid retaliation. In China, tourism data was mixed, and although the number of visits exceeded pre-pandemic highs, they are rising at a slower pace.
What we expect for today
European stock markets would open flat, underpinned by the depreciation of the euro and after the situation in Russia has been calmed down. Currently, S&P futures are up +0.22% (the S&P 500 ended down -0.14% vs. the European closing bell). Volatility in the US rose (VIX 13.44). Asian stock markets are sliding (China’s CSI 300 -1.09%, Japan’s Nikkei -0.10%).
Today in Germany we will learn June’s IFO and in Mexico April’s IGAE economic activity. Debt auctions: Germany (€ 6 Bn in 6M and 12M t-bills).
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.
Sacyr is the parent company of a group engaged in the acquisition, development and construction of urban properties for their subsequent rental or resale. Co. primarily leases and sells office buildings and complexes, housing units, and shopping centers. Co. is also engaged in the operation of urban car parking facilities. Co. offers services related to the real estate industry such as technical assistance in energy savings, inventory management, architectural design, telecommunications management, property maintenance, as well as gardening and landscaping. Co. also provides consulting services in the real estate fund management sector.
Talgo is engaged in designing, manufacturing, repairing and maintaining the railway rolling stock, as well as the manufacturing, assembling, repairing and maintaining the engines, machinery and parts of the railway systems. Co. has an industrial presence in seven countries: Spain, Germany, Kazakhstan, Uzbekistan, Russia, Saudi Arabia and U.S.A. Co. has an active fleet in Europe, Asia and North America that comprises of 94 high-speed trains and more than 1,400 Talgo tilting passenger cars. Also, Co. purchases, redesigns, constructs, leases and sells all types of real estate.
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