IBERIAN DAILY 17 APRIL + 1Q’24 RESULTS. PREVIEWS (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: NATURGY, TALGO.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 1Q’24 results to be released over the coming days in Spain.
Sovereign yields near new annual highs
After the good macro data released in the US last Monday, fears about a new delay in rate cuts increased and stock market corrections saw a contagion effect in Europe. The Ibex dropped below the 10,600-point level, with the 10Y bond yield at 3.3%. In the STOXX 600, all sectors ended with drops, led by Basic Resources and Banks vs. defensive sectors such as Food and Telecoms that saw the best relative performance. On the macro side, the IMF raised its global growth forecasts for 2024 by +0.1pp to 3.2%, with the US standing out (+0.7pp in 2024 up to 2.7% and 1.9% in 2025), while it cut its growth expectations for the euro zone by one tenth in 2024 to 0.8% (1.5% in 2025) due mainly to Germany and France. However, the IMF raised its growth forecast for Spain by +0.4pp to 1.9% and 2.1% in 2024/25. On the macro side, in Germany, April’s ZEW index climbed more than expected for the fourth consecutive month to March’22 levels, with the divergence of the current situation component widening (in negative territory and dropping more than expected). In the UK, February’s ILO unemployment rate rose more than expected. In the US, March’s industrial output climbed in line with expectations whereas March’s housing starts and construction licenses dropped more than expected. From the Fed, J. Powell admitted that the deflation process will take longer than expected, suggesting cuts will be delayed and that rates will remain higher for longer. In US business results, Morgan Stanley came in above expectations whereas Bank of America released disappointing figures.
What we expect for today
Stock markets would open flat with some bearish bias, welcoming the good inflation data released in the UK but with all eyes on the 20Y bond auction to be held in the US. Currently, S&P futures are up +0.12% (the S&P 500 ended down -0.16% vs. the European closing bell). Asian stock markets are mixed (China’s CSI 300 +0.58%, Japan’s Nikkei -0.61%).
Today in the euro zone and the UK we will learn March’s final inflation. European Council meeting. In US business results, Abbot, Prologis and Equifax, among others, will release their earnings.
Talgo is engaged in designing, manufacturing, repairing and maintaining the railway rolling stock, as well as the manufacturing, assembling, repairing and maintaining the engines, machinery and parts of the railway systems. Co. has an industrial presence in seven countries: Spain, Germany, Kazakhstan, Uzbekistan, Russia, Saudi Arabia and U.S.A. Co. has an active fleet in Europe, Asia and North America that comprises of 94 high-speed trains and more than 1,400 Talgo tilting passenger cars. Also, Co. purchases, redesigns, constructs, leases and sells all types of real estate.
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