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IBERIAN DAILY 20 JULY + 2Q’23 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: LOGISTA.

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’23 results to be released over the coming days in Spain.

Inflation moderates but remains high
Stock exchanges ended flat despite the good reaction to the UK’s inflation data and to the good US results. Thus, in the Euro STOXX, Real Estate (climbing above +4.0%), followed by Energy were the best performers whereas Retail and Media ended with the biggest drops. On the macro side, in the euro zone, June’s final inflation confirmed the preliminary data of 5.5% YoY although the core data was raised one tenth to 5.5%. In Germany, tax collection fell -7.3% YoY in June, and the Minister of Finance warned that recovery will be delayed. In the UK, June’s inflation moderated more than expected, coming in at 7.9%, as well as the core data that fell to 6.9%. In the US construction permits slowed down more than expected, whereas housing starts dropped unexpectedly. On the geopolitical front, J. Kerry was optimistic about reaching agreements with China on trade and weather issues ahead of the COP28 climate conference to be held in Dubai. On another note, the IMF warned that the end of the cereal export agreement in the Black Sea worsens food security prospects, jeopardising the deterioration of the global food inflation. In China, the PBoC kept reference rates unchanged on 1Y and 5Y loans at 3.55% and 4.2%, respectively. In Japan, June’s exports grew less than expected, while imports fell more than expected. In US 2Q’23 results, Goldman Sachs released worse earnings than expected, US Bancorp and Zion were in line, Netflix released disappointing sales and subscriber forecast for Q3 and Tesla was worse in margins.
What we expect for today
European stock markets would open with drops of -0.2% that would worsen throughout the session, with the worse performance of the technology sector. Currently, S&P futures are down -0.13% (the S&P 500 ended -0.18% lower vs. the European closing bell). Volatility in the US rose (VIX 13.76). Asian stock markets are mixed (China’s CSI 300 +0.12%, Japan’s Nikkei -1.21%).
Today in Germany we will learn June’s production prices, in the euro zone July’s consumer confidence, in the US weekly jobless claims, July’s Philadelphia Fed index and June’s existing home sales. In US 2Q’23 Results, Abbott, Phillip Morris, Blackstone and American Airlines, among others, will release their earnings. As for auctions, Spain will issue € 6 Bn in bonds due 2026, 2028, 2039 and 2050.


COMPANY NEWS

2Q’23 Results highlights and rest of previews
Of the stocks releasing their earnings over the coming days, on the positive side we highlight: (i) Ferrovial (27/07), where we expect strong performance from the Managed Lanes and margin expansion in Construction, which should continue to underpin the stock, and (ii) BBVA (28/07), where despite some improvement in LfL, the drop in margins in 1H’23 will be significant (around -160bps) and indications on demand in the US and China will not clear up doubts in the short term.
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