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IBERIAN DAILY 02 NOVEMBER + 3Q’23 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: SACYR.

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 3Q’23 results to be released over the coming days in Spain.

Disappointing macro data ahead of the Fed meeting
It was a volatile session in Europe ahead of the Fed meeting, where the worse macro data out of the US (ADP employment report and manufacturing ISM) and the drop in debt yields helped European stock markets turn upwards, with the IBEX approaching 9,100 points. In the STOXX 600, only Media and Chemicals posted losses, whereas Retail and Financial Services led the gains. On the macro side, in the US October’s ADP private employment grew less than expected, where a slowdown in salary growth was also seen. October’s manufacturing ISM once again fell more than expected, the 12th straight month of contraction, with a sharp drop in the orders and employment headings. The Fed kept rates stable at 5.25%-5.50%, although Powell did not rule out the possibility of rates being raised again if necessary. In Brazil, as expected the Central Bank cut the Selic reference rate by -50bps to 12.25%. In 3Q’23 US business results, AirBnB beat expectations, with Metlife and Mondelez in line.
In currencies, the euro remained stable near 1.054 (currently at 1.0594). In raw materials, Brent crude futures rose to US$ 88.30/barrel (currently at US$ 85.39/barrel). Gold remained stable below US$ 2,000/oz (currently at US$ 1,985).
In fixed income, European sovereign yields continued to fall thanks to the disappointing macro data, leaving the German 10Y bond at 2.76% and the Spanish benchmark at 3.83%. In the US, the poor macro data led the 10Y bond to tighten to 4.73%, also underpinned by a debt issuance programme that will be slightly less demanding in long-term debt, and by the Fed having kept rates unchanged.
What we expect for today
European stock markets would open with gains of around +0.5%, with growth benefiting from the falling debt yields. Currently, S&P futures are up +0.11% (the S&P 500 ended up +0.70% vs. the European closing bell). Volatility in the US fell (VIX 16.87). Asian stock markets are mixed (China’s CSI 300 -0.24%, Japan’s Nikkei +1.10%).
Today in Spain and the euro zone we will learn October’s manufacturing PMI and in the UK the BoE will meet. In US business results, Apple, Starbucks, Moderna, Fox, Booking and Expedia, among others, will release their earnings.