Is the public in a panic? not for now. Friday’s sharp declines on Wall Street today, as expected, also reached Tel Aviv and led to sharp declines of 3.5 in the Tel Aviv 35 index, Tel Aviv 90 fell 3.8%, and banks fell 3.8%. But despite the sharp declines, the public Today it has redeemed only NIS 150 million. This does not mean that the redemptions will not come later (when NIS 4 billion was redeemed from the industry last month), but the interesting question now is whether it is time to go back and buy shares. It will stop, but at some point the declines will probably end, the world will calm down and the money will flow back to the stock market.But the new millionaires are actually born in the difficult days of the stock market, not when everything is calm.
So the markets are moving nervously – day down day up, but even after a period of sharp declines since the beginning of the year, the markets have not crashed. The S & P500 fell ‘only’ by 18%, and despite all the days of sharp and frightening declines, the Dow fell by only 13%, while the Nasdaq of course fell by more than 27.5%. In Europe, too, the declines are only around 13% Since the beginning of the year. The markets in Israel have not fallen so strongly either. Tel Aviv 35 fell by only 8%, Tel Aviv 90 fell by only 11%, while the real estate index lost 21%. Once again, it has been proven that the best way to spread the risk is through diversity – not to put all the eggs in one basket, not even in one sector (high-tech in the US or real estate in Israel).
So every day there is a new source of nervousness, but are the stock markets crashing and “there are declines that have never been”? Definately not. Very far from it. This does not mean that there can be no sharper declines, but it does mean that proportions should be maintained. It is also worth remembering that the markets are still much much higher than the records recorded before the corona plague.
So yes, there are redemptions in the market, but there is nothing to compare the situation now to the panic and spending of investors’ money during the falls in Corona. And when you see that the Israeli market has fallen much less – you can also understand why. Some of the redemptions, by the way, also come because of the active (managed) fund managers who liquidated themselves because they anticipated redemptions down the road.
On Wednesday of this week, the Fed is likely to raise interest rates. The only question is whether at 0.5% or he will decide to go in an even more hawkish direction of 0.75%, following the continued rise in inflation to 8.6% – and despite the Fed chairman saying it is not on the agenda. This of course will continue to affect investors in Tel Aviv.
Tomorrow the question will be how the trading week will open on Wall Street, the direction of the contracts will also affect the direction of Tel Aviv.
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