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IBERIAN DAILY 08 AUGUST + 2Q’22 RESULTS PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: NATURGY.

At the end of today’s report, and during the entire results season, we will include a presentation with previews for the 2Q’22 results to be released over the coming days in Spain.

The US labour market remains very strong
It was a positive week for European stock markets despite the strong US labour market, which continues to back the Fed’s normalisation of the monetary policy. Thus, in the Euro STOXX, the best-performing sectors were Retail and Banks last week, whereas Real Estate and Food saw the day’s biggest losses. On the macro side, in Germany, July’s industrial output recovered more than expected and in Spain it climbed more than expected. In the US, July’s job data were stronger than expected, with non-farm job creation doubling the expected level and the unemployment rate falling to 3.5%. Moreover, wage earnings remained at very high levels (5.2% YoY). Separately, the US Senate approved Biden’s bill to combat climate change, reduce drug prices and increase some corporate taxes. Estimates point to an investment of US$ 430 Bn, with US$ 740 Bn in new revenues. In China, July’s imports/exports increased more than expected, which hints at a recovery of the trade balance. On the geopolitical front, the Govt. announced sanctions against N. Pelosi and suspended talks with the US on defence and climate change. The positive note was in Hong Kong, where the quarantine for travellers was reduced to 3 days. In US business results, Alliant Energy y Western Digital came in better than expected, Westinghouse in line.
What we expect for today
European stock markets would see a bullish opening after digesting the rate rise. Currently, S&P futures are down -0.24% (the S&P 500 ended -0.5% lower vs. the European closing bell). Volatility in the US rose (VIX 21.15). Asian markets are mixed (China’s CSI 300 -0.51% and Japan’s Nikkei +0.32%).
Today in the euro zone we will learn SENTIX investment confidence index. In US business results, Tyson Foods, Oneok and Dominion Energy, among others, will release their earnings.

COMPANY NEWS

NATURGY. 1H’22 Results postponed to 11/08 on ruling on Metrogras, S.A. (55.6% NTGY). SELL
Last Friday afternoon, the company communicated it will release in the end its 1H’22 Results on 11/08 (vs. 05/08 expected) due to a first-instance conviction (and thus, appealable) on Chile’s Metrogras. (55,6% NTGY) due to the lawsuits brought by Transportadora de Gas del Norte, S.A. as a result of a gas transport contract that was affected by the energy crisis between Argentina and Chile. The initial estimate in NTGY’s 1H’22 consolidated results is that the impact would be limited, although a thorough analysis will be conducted over the coming days, which justifies the delay in the earnings release. Since the announcement of this delay, the share price slid around -3% (some € 780 M), underscoring the uncertainty surrounding the ruling.