Morgan Stanley | We reviewed the European telecoms sector where we thought, confronted by an environment where there have been numerous profit warnings in the global technology sector (Ericsson, Hexagone, Netflix, Software AG, Tieto), together with our global recommendation downgrade from RV to UW, that the telecoms are well positioned to offer a better performance than seen in Q418.
Banc Sabadell | The provisional government in Spain, if its finally confirmed in office, will immediately renew most of the Council of the competition regulator (CNMC – six of the ten council members end their term in September 2019) and open the door to restructuring the body.
The impact of Netflix and Amazon on terrestrial TV in Europe has been remarkable. The worst countries are Spain (-7%), the UK (-6%) and France (-5%). Morgan Stanley decided to cut their forecasts and objective prices for European broadcasters. The principal cut is Prosieben, for which they see a downside potential of 20%.
The relatively poor performance continues. “So far this year, Spanish banks have been the worse performing subsegment in the universe of European banks we cover, with average fall of c.14% (total returns)”, analysts at Santander point out.
Stefan Scheuer (Allianz GI) | What will the Federal Reserve do? This is the question most asked by investors. In the US, the labour market remains in shape, households remain wiling to spend and inflation data has been better than expected.
Chinese investment in Spain has reduced drastically in the first of half of 2019, falling to a modest 10 Mn$, according to a study published by Baker McKenzie.
Bankinter | The US Senate finally approved the MoU to avoid double taxation with Spain, which will mean a tax cut for companies which operate in both countries. The current MoU dates from 1990 and the one ratified some days ago was signed in 2013.
Chris Iggo (AXA IM) | Sensible economic and monetary policies don’t necessarily go hand in hand with populism (see the recent sacking of the Turkish central bank head). In a world of more extreme policy agendas, a resort to manipulating currencies could be seen. No-one wants a strong currency now and the costs of devaluation are not really recognised in a low inflationary world. But attempting to override markets in setting the international price of currency is a difficult policy, especially if done unilaterally.
BBVA Research | The recovery of the Spanish economy will continue during the two years 2019-2020. In fact, and despite the risks which still hang over the scenario, growth expectations have been revised upwards one tenth to 2.3% for 2019 and remain at 1.9% for 2020.
Peter Isackson via Fair Observer | Boris Johnson’s march to Downing Street is becoming a surreal, even psychedelic, cartoon hovering between tragedy and farce.