IBERIAN DAILY 27 AUGUST (ANÃLISIS BANCO SABADELL)
NEWS SUMMARY: IBERDROLA, OHL.MARKETS YESTERDAY AND TODAY
Stock markets maintain confidence in Trump
D. Trump’s more optimistic message on the possibility of coming to an agreement with China led stock markets to rally worldwide despite a spokesperson for the Chinese government denying a phone call to resume conversations. Within the Euro STOXX, the best-performing sectors were Banks and Autos vs. the drops in Real Estate and Retail. On the macro side, the G-7 summit ended with a compromise between the US and France on the Google tax meaning that the impact from this tax on US companies will be delayed until new OECD regulations come into force. In Germany, the IFO index for August contracted more than expected (to 4Q’12 levels), hinting at GDP growth in the 3Q’19 of 0.2% QoQ vs. 0.5% expected. From the ECB, J. Weidman seemed more inclined to extending the purchase programme than to cutting rates. In Brexit, the EU leaked that it would block any trade deal with the UK if B. Johnson reneged on the exit bill (£ 39 Bn) even in the event of a disorderly Brexit. In the US, July’s durable goods orders climbed unexpectedly thanks to more volatile items but, despite recovering, shipments contracted more than expected, which continues to hint at weak capital goods investment levels in the 3Q’19, dragged down by tariffs. Separately, D. Trump expressed his confidence in striking a trade deal with the EU without imposing tariffs on autos.
What we expect for today
Stock markets would open with gains of up to +0.2% amid trade war doubts following D. Trump’s upbeat tone regarding China, as even if the country wished to reach an agreement, the current conditions are far from the US requirements.
Currently, S&P futures are trading unchanged (the S&P 500 closed up +0.30% vs. its price at the closing bell in Europe). Volatility in the US fell (VIX 19.32%). The Asian markets that are open are trading with mixed results (Hong Kong -0.07% and Japan +1.04%).
Today, we will learn: in Germany, the final reading of the 2Q’19 GDP; in the US, the Conference Board consumer confidence and the Richmond manufacturing index (both August); in Mexico, July’s trade balance. In debt auctions: Germany (€ 5 Bn in bonds due 2021).
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.
Obrascon Huarte Lain is an international concession and construction groups based in Spain. Co. maintains significant operations in 30 countries across all five continents. Co. is engaged in hospital and railway construction, transport infrastructure concessions, oil and gas, energy, solids handling and fire protection systems and international contracts. Co.'s operations are organized along four divisions: OHL Concesiones, OHL Construccion, OHL Industrial y OHL Desarrollos. Co. is also engaged in real state project developments of mixed use managed by the international hotel chains.
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