EUR 100.00 For Business Accounts Only

IBERIAN DAILY 04 DECEMBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: SACYR.


MARKETS YESTERDAY AND TODAY

Stock markets hold firm
There were slight drops on European markets after the euro hit 1.2170, although the solid opening in the US allowed for a rally at the end of the session. In the Euro STOXX, the best-performing sectors were Travel & Leisure and Banks, whereas Telecoms and Chemicals were the worst relative performers. On the macro side, in the euro zone November’s final service PMIs improved on the preliminary data thanks to the solid performance in Spain and France, whereas October’s retail sales rose almost twice what was expected. In Spain, PM Pedro Sanchez’s budgets have passed the last step in Congress and are expected to be approved on 29 Dec’20, the first for a coalition government and for the first time since 2018. In the US, weekly jobless claims, but also November’s services ISM, fell less than expected, with the ISM suggesting a rally in the GDP in 4Q’20 in line with the 4.0% QoQ expected by the consensus. In the end the OPEC+ meeting led to a production increase of +500,000 b/d starting in January and reviewable on a monthly basis (vs. up to 2 M b/d originally forecast). As for China, tension with the US continues to mount after the latter lengthened the list of Chinese companies being monitored (considering them to be controlled by the army).
What we expect for today
We expect a moderately bullish opening, awaiting US employment data this evening, although after the closing bell in Europe Wall Street faltered with the news of problems in Pfizer’s production line and a reduction expected in its vaccine production. Doubts also continue to surround Brexit after Macron took a more aggressive stance on fishing rights and British state aid. Currently, S&P futures are up +0.22% (the S&P 500 closed down -0.29% vs. its price at the closing bell in Europe). Volatility in the US increased (VIX 21.28). Asian markets are trading with mixed results (CSI 300 +0.2%, Japan -0.2%).
Today in Germany we will learn October’s factory orders, in Mexico November’s consumer confidence and in the US non-farm job creation, unemployment rate, salary gains (all for November), as well as October’s trade balance and durable goods orders. In ratings, Fitch will review that of Italy (BBB-, stable).