Trade overview: current reports, trends, indices, stock prices, bonds, foreign exchange and commodities and analyst recommendations
07:45
1. The stock markets
Asian stock markets are trading in a positive trend today. In Tokyo, the Nikkei index rises by about 0.4%, the Hang Seng index in Hong Kong climbs by about 1%, and in Seoul, the Kospi registers an increase of about 0.4%. Shanghai rises by about 0.1%.
Trading in futures contracts on US stock market indices is now showing slight increases. This is after trading in New York closed yesterday without significant change. The Dow Jones index added 0.1%, the S&P 500 index strengthened by 0.1%, while the Nasdaq index weakened by 0.1%
● The markets are hoping for a compromise. What will happen to them the next day?
The Stock Exchange in Tel Aviv is closed today for Purim. Yesterday trading in the local market closed with gains: the Tel Aviv 35 index advanced by 1.5%, the Tel Aviv 125 index added 1.6%, the Tel Aviv 90 index strengthened by 2.2%, the communications index rose by 2.6%, and the insurance index jumped by 2.9 %.
● The shekel soars and the upheaval in bonds: what does Globes’ pulse index say about the situation in the economy?
2. The bond markets
US government bonds are now seeing a slight drop in yields. This is after yesterday the yields on government bonds in the US continued to strengthen until the closing. The yield on the two-year bond increased by 2 points, and the yield on the 10-year bond added a point and a half to 3.97%.
In the local bond market, trading closed yesterday with the long-term shekel government bonds rising by up to 1.4%, in the index closes the trend was mixed and the central Tel Bond indices climbed by about 0.2%.
● The markets question the unwritten rule “never bet against German bonds”
3. The commodity and currency markets
In the commodity market, increases of about 0.3% are recorded in crude oil contracts. American WTI oil traded around $80.7 per barrel and Brent oil around $86.4 per barrel. Gold is stable around $1,853 per ounce.
In the global forex market, the euro and the pound are strengthening by about 0.1%-0.2% against the dollar and the Japanese yen is weakening by about 0.1%.
Yesterday there was an upheaval in the local foreign exchange market, and the shekel returned to the levels it was at about two weeks ago and moved away from the low point it reached only recently. The dollar traded at around 3.59 shekels at the end of the day after standing at around 3.66 shekels in the morning. The sharp increase came after the President of the State Yitzhak Herzog announced An announcement regarding the legal reform according to which “we are closer than ever to the possibility of an agreed outline. There are agreements behind the scenes on most things.”
Slight gains are being recorded in the crypto market today. Bitcoin is trading around $22,500 and Ethereum is trading around $1,575.
4. Macro
Today (Tuesday) the Central Bank of Australia decided to raise the interest rate in the country by 0.25% to 3.6%, in line with expectations.
In China it was announced that exports recorded a 6.8% decrease in February, compared to an expected decrease of 9.4%. Import data to the country indicated a 10.2% drop last month, compared to an expected 5.5% drop. China’s trade surplus in February was about 116.9 billion dollars.
Today and tomorrow at 17:00 Israel time, Fed Chairman Jerome Powell is expected to speak before the Joint Economic Committee in Washington, and there will also be a question and answer phase that, as always, may shake the market. On Friday, the most important statistic of the week will be published – the employment report in the US b that will also affect what happens in the markets. The expectation is for an addition of 210 thousand jobs in February and an unemployment rate of 3.4%, similar to the month of January.
On Wednesday, growth data will be published in the Eurozone (when a 0.1% increase in fourth quarter GDP is expected, an annual growth rate of 1.9%). In the US, the ADP survey data will be published (at 3:15 p.m. Israel time) when the expectation is for an increase of 195 thousand jobs in the private sector in February. After that (at 17:00) the number of open jobs in February will be published, which is expected to be around 10.6 million.
On Thursday, growth data in Japan, the consumer price index in China will be published, on Friday the interest rate decision in Japan, growth data in Great Britain and, as mentioned, the employment report in the US will be published.
5. Forecast
Uri Greenfeld, the chief strategist of Psagot Beit Investments, points out in a review that he published that “if in January the estimates that the American economy was entering a process of soft landing grew stronger, then in February the bowl turned upside down and the landing suddenly turned into a takeoff. The main reason for the frenzy of the forecasts, apart from the investors’ natural fondness for the dramatic Excessively, it is the Fed that also reacts to events, almost every week, and creates restlessness. Neil Kashkari, the president of the Minneapolis Fed, was the best example of this last week when he managed in one speech to say a lot of things without actually saying anything. According to Kashkari, the Fed does not We still see signs that their policies are succeeding in affecting the service industries, which is indeed worrying, but it also takes time for the policies to have an effect.”
It’s difficult, writes Greenfeld, “to blame the members of the Fed, since in the end they too grope in the dark like the rest of us, but they could have been expected to emphasize that in the end everything works according to plan. Roughly. The economic cycle of the last two years was unusual in its intensity but normal Very much in essence. Excess demand led to inflation and interest rate hikes will cool demand and inflation. It takes time but the evidence on the ground shows that the process is indeed taking place.”
“In 2022, the Fed carried out the most aggressive interest rate hike ever recorded in a calendar year and the credit market signals that this move is working. The credit officers’ survey shows that in all segments credit conditions have been tightened and the percentage of banks that reported an expected increase in loan defaults and provisions continues to rise. According to S&P Subprime auto loans that are 60 days or more in arrears are already at 6.05%, higher than the 2009 level and according to Bloomberg, in the first two months of this year 59 companies filed for bankruptcy on a large scale (more than $50 million in liabilities). This is the fastest rate in the first two months of the year since 2009, when 63 such were registered.”
Bottom line, he says, “It is difficult to see a picture in which the American economy does not enter a recession towards the middle of the year. A recession that will lead to a slowdown in the labor market and a cooling of inflation in the service industries. However, as we noted two weeks ago, the extent of household savings from the Corona period and the long-term debts at low interest of the business sector will probably delay and weaken the whole process, which will really allow for a soft landing.”