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MARKETS YESTERDAY AND TODAY
More profit-taking on stock markets
The European stock markets erased their gains as interest rates increased, accelerating after the poor ISM non-manufacturing data. Within the Euro STOXX, cyclical sectors such as Travel&Leisure and Autos rose the most, whereas defensive ones such as Utilities and Pharma saw the biggest losses. On the macro side, in the Euro zone, February’s final Services PMI improved significantly thanks to Italy, hinting at 1Q’21 growth in line with the -3.6% YoY expected by the consensus. In the US, February’s ISM non-manufacturing index fell more than expected, whereas the price subindex climbed sharply, hinting at inflation rates higher than 3.5% YoY in 2Q’21. Separately, the ADP private employment survey increased less than expected in February. The Fed’s Beige Book showed the economy growing at a modest pace, with pressure on basic material prices. In Brazil, the 4Q’20 GDP contracted by -1.1% YoY (less than expected).
What we expect for today
European stock markets would open with losses of around -0.3% that would increase throughout the session. The energy sector will pay close attention to the OPEC+ decision, where Russia and the UAE are in favour of increasing production and Saudi Arabia could gradually eliminate its 1.0 Mbd cut. Currently, S&P futures are down -0.50% (the S&P 500 was down -1.05% vs. its price at the closing bell in Europe). Volatility in the US rose (VIX 26.67). Asian markets are falling (CSI 300 -3.05%, Japan -2.13%).
Today the OPEC+ will meet. In the Euro zone we will learn retail sales data and the unemployment rate (both for January), and in the US weekly jobless claims and January’s final durable goods orders. In debt auctions, Spain (€ 7 Bn in bonds due 2026, 2028, 2031, 2035 and I/L bonds due 2030).
COMPANY NEWS
INDITEX. 4Q’20 Results Preview.
The company will release its 4Q’20 results on the 10th of March. Although the quarter got off to a poor start, we think the second half should be even worse due to the effect from restrictions put in place for the third wave of Covid-19, which were stricter in late December and all of January. -23% in Sales in 4Q’20 standalone BS(e), -42% in EBIT, -42% in Net Profit. Although visibility is low because the situation is exceptional, we believe that the share price is already factoring in a recovery scenario, and thus we do not see further upside from these levels.
IBERIAN DAILY 04 MARCH (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: INDITEX.MARKETS YESTERDAY AND TODAY
More profit-taking on stock markets
The European stock markets erased their gains as interest rates increased, accelerating after the poor ISM non-manufacturing data. Within the Euro STOXX, cyclical sectors such as Travel&Leisure and Autos rose the most, whereas defensive ones such as Utilities and Pharma saw the biggest losses. On the macro side, in the Euro zone, February’s final Services PMI improved significantly thanks to Italy, hinting at 1Q’21 growth in line with the -3.6% YoY expected by the consensus. In the US, February’s ISM non-manufacturing index fell more than expected, whereas the price subindex climbed sharply, hinting at inflation rates higher than 3.5% YoY in 2Q’21. Separately, the ADP private employment survey increased less than expected in February. The Fed’s Beige Book showed the economy growing at a modest pace, with pressure on basic material prices. In Brazil, the 4Q’20 GDP contracted by -1.1% YoY (less than expected).
What we expect for today
European stock markets would open with losses of around -0.3% that would increase throughout the session. The energy sector will pay close attention to the OPEC+ decision, where Russia and the UAE are in favour of increasing production and Saudi Arabia could gradually eliminate its 1.0 Mbd cut. Currently, S&P futures are down -0.50% (the S&P 500 was down -1.05% vs. its price at the closing bell in Europe). Volatility in the US rose (VIX 26.67). Asian markets are falling (CSI 300 -3.05%, Japan -2.13%).
Today the OPEC+ will meet. In the Euro zone we will learn retail sales data and the unemployment rate (both for January), and in the US weekly jobless claims and January’s final durable goods orders. In debt auctions, Spain (€ 7 Bn in bonds due 2026, 2028, 2031, 2035 and I/L bonds due 2030).
COMPANY NEWS
INDITEX. 4Q’20 Results Preview.
The company will release its 4Q’20 results on the 10th of March. Although the quarter got off to a poor start, we think the second half should be even worse due to the effect from restrictions put in place for the third wave of Covid-19, which were stricter in late December and all of January. -23% in Sales in 4Q’20 standalone BS(e), -42% in EBIT, -42% in Net Profit. Although visibility is low because the situation is exceptional, we believe that the share price is already factoring in a recovery scenario, and thus we do not see further upside from these levels.
Underlying
Inditex (ITX SM)
Provider
Sabadell
Research Department
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