EUR 100.00 For Business Accounts Only

IBERIAN DAILY 03 AUGUST (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: TELEFÓNICA.

Markets in the red
Fitch’s surprise rating downgrade on US debt from AAA to AA+ as a result of the fiscal deterioration expected over the next 3 years and the eroded governability led to drops on European markets of more than -1.5%. In the Euro STOXX, all the sectors closed in the red, led by Consumer Goods and Retail, with Household Goods and Insurance the best relative performers. On the macro side, in Spain unemployment fell by -11,000 in July and the number of unemployed hit a low since 2008. The ECB published the latent losses all European banks have in public debt at the amortised cost (which was what was under the microscope during the US banking crisis). In the US, private payrolls rose more than expected in July, which continues to confirm the strong job market and keeps pressure on the Fed to maintain or even raise interest rates further. In Brazil, the Central Bank lowered interest rates by -50bps to 13.25%. In Japan, July’s final manufacturing PMI was cut slightly. In China, July’s Caixin services PMI rose more than expected. In US business results, DuPont was in line, Yum! beat expectations and PayPal came in below.
What we expect for today
European stock markets would open with losses following the drops in Asia, dragged down by the US and tech stocks. Currently, S&P futures are down slightly (the S&P 500 ended down -0.5% vs. the European closing bell). Volatility in the US rose (VIX 16.10). Asian stock markets are falling (China’s CSI 300 -0.02%, Japan’s Nikkei -1.31%).
Today in the euro zone we will learn July’s final services PMI, in the UK the BoE meeting and in the US July’s services ISM, June’s factory orders and weekly jobless claims. In US 2Q’23 Results, Amazon, Motorola, Moderna and Kellogg’s, among others, will release their earnings.