EUR 100.00 For Business Accounts Only

IBERIAN DAILY 22 AUGUST (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: LIBERBANK, UNICAJA.

MARKETS YESTERDAY AND TODAY

Stock markets rely on possible stimulus measures
Despite France considering a no-deal Brexit as the base-case scenario and Trump going back on the previous day’s statement on the possibility of lowering taxes in the US, the main European stock markets posted gains of +1.0% or higher, underpinned by expectations of fiscal stimuli and the positive business results in the US. Within the Euro STOXX, all sectors rose, led by Consumer Goods and Industry, whereas Banks and Telecoms lagged behind. On the macro side, in the US, second-hand home sales increased in July in line with expectations. Separately, the Fed minutes revealed a lack of consensus among the members as regards interest rates, but suggested additional cuts of at least 25bps in what the members consider as a mid cycle adjustment, hinting at possible rate hikes going forward. In Japan, August’s manufacturing PMI rose slightly, yet standing below 50, as is the case with external orders, whereas the services PMI climbed notably, hinting at solid growth in consumption in the 3Q before the tax rise in the 4Q. In US business results, Lowe and Target Corp. released better results than expected.
What we expect for today
Stock markets would see a slightly bearish opening following yesterday’s rally.
Currently, S&P futures are down -0.1% (the S&P 500 closed -0.10% vs. its price at the closing bell in Europe). Volatility in the US fell (VIX 15.80%). Asian markets are falling (Japan flat and Hong Kong -1.0%).
Today, we will learn: in the Euro zone, August’s consumer confidence and preliminary manufacturing and services PMIs. In US business results, Gasp and Salesforce, among others, will release their earnings.