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IBERIAN DAILY 24 AUGUST (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: REPSOL.

Market still on high alert
European stock markets closed with losses awaiting the Jackson Hole conference in which a more hawkish speech from J. Powell could lead to dovish surprises according to the market’s current position. In this regard, Kashkari is convinced that the Fed must continue to toughen monetary policy. Separately, the pressure on the energy market continues, with natural gas futures skyrocketing after it was announced that NS1 would be shut down for 3-day maintenance starting on 31 August (raising risks of a permanent closure), and with electricity prices at record highs in Europe since the new gas price cap came into force. Thus, in the Euro STOXX Energy (thanks to the rising crude oil price) and Basic Materials were the best performers, with Telecoms and Pharma posting the biggest drops. On the macro side, in the euro zone we learned August’s preliminary PMIs, with the manufacturing index beating expectations (still contracting) and the services index coming in below. In the US, second-hand home sales fell sharply to its lowest level since 2016, while the Richmond Fed index came in far below expectations.
What we expect for today
European stock markets would open with slight losses, dragged down by the energy uncertainties in Europe and the next moves to be made by central banks. Currently, S&P futures are down -0.22% (the S&P 500 ended down -0.29% vs. the European closing bell). Volatility in the US rose (VIX 24.16%). Asian markets are falling (China’s CSI 300 -1.36% and Japan’s Nikkei -0.39%).
Today in the US we will learn pending home sales, August’s mortgage applications and July’s preliminary durable goods orders. In debt auctions: Germany (€ 4 Bn in bonds due 2032).