Trade overview: current reports, trends, indices, stock prices, bonds, foreign exchange and commodities and analyst recommendations
07:44
1. The stock markets
The trading day on the stock exchange is expected, apparently, to open with a mixed trend. This is after the trading day on the stock exchange closed yesterday with gains. The Tel Aviv 35 index ended a volatile day with an increase of 1.1% and the Tel Aviv 90 index climbed by 1.6% in parallel with a positive trend in Europe and New York. The cleantech index jumped by 2.7%, the banking index by 1.9% and the real estate index stood out with an increase of about 1.8%. The trading turnover amounted to about NIS 2 billion.
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Trading in futures contracts on US stock market indices is now stable. Last night on Wall Street trading closed higher, at the end of another volatile day. The Nasdaq index jumped at the end by 2.1%, the Dow Jones index rose by about 1% and the S&P 500 index advanced by 1.7%. The shares of the small and medium-sized banks jumped by dozens of percent, after falling the day before.
In most Asian stock markets the trend is positive today. In Tokyo, the Nikkei index registers a slight increase, the Hang Seng index in Hong Kong registers an increase of about 1.3% and in Seoul, the Kospi advances by 1.5%. The Shanghai Stock Exchange rises by about 0.7%.
Most of the dual stocks came back from New York with negative spreads so they are expected to go down today. nature About 1.3%, Energian 0.6% and vice versa Liveperson with a positive gap of about 3% andhis horizon 3.2%.
Ormat reported after the end of trading in New York that it is going to raise hundreds of millions of dollars by issuing 3.6 million shares. In response, the stock fell by 6.7% in late trading, so it is expected to drop sharply in Tel Aviv as well.
Electra Real Estate This morning reported a net profit of about 180 million dollars in 2022 compared to a net profit of about 128 million dollars in 2021.
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2. The bond markets
US government bonds are now seeing an increase in yields, after yesterday in US government bond trading the trend was reversed and strong increases were recorded in yields, after falling sharply in the previous three trading days. The two-year bond yield rose 20 basis points to 4.23% and now stands at about 4.32%. The 10-year bond yield climbed 13 basis points to 3.64% yesterday and is now rising to 3.68%.
Trading in the local bond market closed yesterday with declines of up to 0.6% in long-term shekel government bonds and index bonds fell by up to 1.2%. The corporate Tel Bond indices maintained stability.
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3. The commodity and currency markets
In the commodity market, increases of about 1.4% are recorded in crude oil contracts after they fell by more than 4% yesterday. American WTI oil is trading around $72.4 per barrel (May contract) and Brent oil around $78.5 per barrel. Gold was almost unchanged at $1,905 an ounce.
In the world forex market, the dollar trades stably against the euro and the pound sterling and strengthens by about 0.3% against the Japanese yen. The foreign exchange experts of the Swiss bank Lombard Odier estimate that the dollar is expected to lose strength in the coming months. “We maintain the bearish forecast for the currency for the second half of 2023. The macro circumstances that supported the dollar have diminished, so any point strengthening is expected to pass. The euro actually benefits from a positive trend attributed to the recent improvement in the balance of payments of the Eurozone, which is in the best condition since mid-2020,” they point out.
The crypto market is stabilizing. After completing a jump of more than 20% in two days, Bitcoin is now trading around $24.8k, and Ethereum is also trading steady around $1,710 after gaining more than 20% in two days.
4. Macro
In China it was announced today that industrial production registered a 2.4% increase in January-February, lower than economists’ expectations for a 2.6% increase. Retail sales expanded in these months by 3.5%, in line with expectations.
Today (at 14:30 Israel time) the producer price index (PPI) data for last month (expected to increase by 0.4%) and retail sales in February which are expected to register a decrease of 0.3% will be published in the USA.
Today (at 18:30 Israel time) the consumer price index data for the month of February will be published in Israel. Macroeconomists predict that the February index will register an increase of 0.2%-0.3%. The rate of inflation in the last 12 months is expected to decrease.
In the USA, the consumer price index for the month of February was published yesterday, during which inflation was recorded at a rate of 0.4%, in accordance with forecasts. The slowdown in annual inflation was also in line with expectations and fell from 6.4% in January to 6%. The core index, on the other hand, which does not include food prices and energy prices, rose by 0.5% in February, a tenth of a percent higher than forecasts, while the annual rate of increase amounted to 5.5%, in accordance with forecasts and a decrease compared to a measurement of 5.6% in January.
After the publication of the macro data, interest rate futures price a 79% probability of an increase of 25 basis points next week, and the rest believe that the Fed will leave the interest rate unchanged at the level of 4.5%-4.75%.
In the Eurozone, a consumer price index will be published on Friday, when the day before the publication of the index, an interest rate decision by the European Central Bank will be published (a 0.5% increase is expected).
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5. Forecast
Ofer Klein, Head of the Economics and Research Department at Harel Insurance and Finance, mentions that Federal Reserve Governor Jerome Powell emphasized in his speech last week that the stronger data than the recently published forecasts may support a higher rate of interest rate increases than previously estimated, but clarifies that the bankruptcy of Silicon Valley Bank (and others ) plays the cards and emphasizes the increase in systemic risk.
“We expect the US Federal Bank to raise interest rates, but only by 25 basis points. “This, along with an upward revision of the central bank’s forecasts for the short-term interest rate – contrary to the latest expectations in the markets according to which the event will cause a halt in the increase in interest rates (and even a lowering in a few months),” Klein noted.
Klein also mentions that the labor market in the US is still very tight, and with it also the pressures for wage increases, “something that supports the continued rise of interest rates even beyond next week.”
Dr. Gil Befman, the chief economist at Bank Leumi, says that the decrease “The major contribution to the price index in the US came from the housing section, but increases were also recorded in other sections. The increase was recorded despite the drop in energy prices, so it is about basic and persistent inflationary pressures.” Befman expects that the Fed will continue to raise the interest rate in its decision next week at a rate of 0.25% against the background of the banking crisis, and it seems that this will not be the last increase.
Modi Shafferer, Bank Hapoalim’s chief financial markets strategist, points out that the publication of the index leads to a slight increase in market forecasts for next week’s interest rate hike. Shafferer also estimates that it is highly probable that the Fed will announce an additional interest rate increase of 0.25% next week.