Trade overview: current reports, trends, indices, stock prices, bonds, foreign exchange and commodities and analyst recommendations
23:05
A trading day with slight fluctuations ended on Wall Street in a mixed trend, the Dow Jones index weakened 0.2%, the Nasdaq index rose 0.4% and the S&P 500 index advanced 0.1%.
In the background to trading, on the second day of his testimony in Congress, Fed Chairman Jerome Powell tried to moderate his words last night caused by sharp declines and clarified that a decision has not yet been made to accelerate the rate of interest rate increases, but that this is a possibility that depends on the data that will arrive.
Increases were recorded in the chip sector and the top of the Dow was led by Marvel which jumped 5%, AMD which rose 4% and Nvidia which strengthened 3.8%. On the downside, drugmaker Merck at the bottom of the Dow lost 2.7%, Tesla fell 3% and energy company Enphase retreated 2.6%.
Among the Israeli companies, Cybervan jumped 13%, Teva rose 2.2% and I.C.L. added 3.9%. On the downside, Redhill fell 2.3%, Wix lost 2.2% and Solaredge weakened 1%.
22:15
Brent crude for May delivery fell 0.8%, or 63 cents, to settle at $82.66 a barrel.
21:45
The WTI oil contract for April delivery fell 1.2%, or 92 cents, to settle at $76.66 a barrel.
20:50
Gold retreated slightly, a contract for delivery in April weakened 0.1%, $1.4, and closed at $1,818.6 per ounce.
20:15
Negative trend on Wall Street: the Dow loses 0.6%, the S&P 500 index retreats 0.2% and the Nasdaq index is stable but on the red side.
stock Tesla Falling more than 3.5% after US authorities began investigating complaints about two incidents in which the steering wheel disengaged in a 2023 Tesla Model Y while driving.
WeWork shares jump more than 4% following a report in the New York Times according to which the company is in talks with investors to raise capital and change the debt structure in the amount of more than 3 billion dollars.
18:55
European stock markets closed in a mixed trend. In Frankfurt the DAX rose 0.5%, in London the POTSI 100 advanced 0.1% and in Paris the CAC 40 retreated 0.2%. The pan-European Stoxx 600 added 0.1%. Health sector shares led the declines and lost 0.6% while banks led the gains and strengthened by 1.2%.
18:15
Trading is conducted in a mixed and volatile trend, at this time the Dow Jones index is down 0.3%, the Nasdaq index is up 0.3% and the S&P 500 index is advancing 0.1%.
In the background to trading, Fed Chairman Jerome Powell’s testimony in Congress continues into its second day. Powell repeated yesterday’s message that the central bank is expected to raise interest rates to a higher level than previously expected and will be ready to act more quickly, but emphasized that a decision has not yet been made And this depends on the data that will be received.
17:15
US Macro: The number of vacancies fell in January to 10.8 million, compared to 11.01 million the previous month but still above expectations which stood at 10.5 million.
16:30
The trading day on Wall Street opened steadily, after the new declines last night and in anticipation of Fed Chairman Jerome Powell’s continued testimony in Congress. The Nasdaq index rose 0.3%, the Dow Jones index advanced 0.1% and the S&P 500 index added 0.1%.
The yield on ten-year US government bonds drops by seven basis points to a level of 3.90%.
In the commodity arena, Brent oil is down about 1% to $82.5 per barrel, WTI oil is losing 1.3% and is trading around $76.6 per barrel. Gold retreated 0.1% to a level of about $1,818 per ounce.
15:18
stock Crowd Strike Holdings Jumps by about 6% in early trading after the software company reported last night good results for the last quarter.
stock Tesla Decreases after Berenberg economists downgraded the recommendation rating for the stock.
US Macro: The ADP survey data indicated an addition of 242,000 jobs in the private sector in February, compared to expectations for an addition of 195,000 jobs.
13:50
European stock markets are trading in a mixed trend. The DAX index moved to a slight increase, while the FTSE remains stable. In futures trading on US stock market indices, slight increases are now being recorded.
BlackRock economists estimate, in a review they published, that the Fed interest rate may rise up to 6%. “We estimate that there is a reasonable chance that the Fed will be forced to raise the interest rate up to 6% and keep it at this level for an extended period of time in order to lower the rate of inflation back to about 2%,” they write.
Berkshire Hathaway bought another 5.8 million shares of Occidental Petroleum In recent days. This is according to a report by the investment giant to the SEC.
The Oppenheimer Investment House published an update to their recommendation for a company Inmod And they note there that “Last week we held a virtual meeting with Moshe Mizrahi, CEO of Inmod, which deals in the field of medical aesthetics. Inmod’s business strategy is built on strengthening its leading position in the field of traditional aesthetics at the same time as expanding its activities into new segments such as women’s health, ophthalmology, otolaryngology and more. Inmod continues to present strong results with high growth rates and high profitability while impressively managing its product portfolio, however the company’s CEO noted that they sense a certain slowdown resulting from challenging macro conditions. Despite this, we maintain our forecast for 2023 and the Outperform recommendation on INMD stock with a target price of $60.”
12:44
Stéphane Monnier, the chief investment officer of the Swiss bank Lombard Odier, published a review with reference to the decline in company profits and analysts’ expectations for 2023: “Companies’ profits in the last quarter of 2022 were weak in all geographies, against the background of declining demand and higher costs. However, sales continued to grow, so we must examine what the company’s earnings tell us as investors about the state of the global economy and the attractive sectors for this period. In addition, analysts’ downgrades to earnings expectations for 2023 were the largest since the financial crisis in 2008 and most expect S&P 500 earnings to be flat in 2023, But this forecast is also optimistic in our opinion, because in a recession profits decrease by 17% on average.”
What does this mean for the stock markets? “The main driver of market volatility in 2022 and early 2023 has been the interest rate outlook, more than the corporate earnings picture. High long-term interest rates will likely cover any increase in valuations, while high bond yields erode the relative incentives to hold stocks. However, we believe US federal funds rates will peak around 5.5% in June and inflation will gradually decline to near 3% by the end of the year. Our historical analysis suggests that US stocks could perform well after the latest rate hike. There are two likely scenarios for the S&P 500 in 2023, at best a rise to 4,500, with 5% earnings growth while maintaining valuations at current levels, or a fall to 3,200 with high inflation and interest rates above 6%, but likely Assume that by the end of the year the index will be around 3,900 points,” he writes.
In this environment, “we prefer a neutral exposure to stocks, and a patient approach to investments while looking for more diversified opportunities outside the US. We are overweight small and mid-cap stocks in China, Japan and emerging markets benefiting from strong domestic demand. In addition, there is a preference for value stocks over growth stocks and defensive sectors such as healthcare and financial services.”
11:30
Dr. Gil Bafman, the chief economist of Bank Leumi, writes following the words of the chairman of the Fed, Jerome Powell, yesterday that Powell confirmed that the interest rate is expected to rise higher than what the market has priced so far. “As a result, the market now estimates that the interest rate will reach 5.5% and more. The market is rapidly approaching the expectation of an interest rate increase of 50 basis points in the upcoming decision on March 22, but this decision may depend on the strength of February’s employment and inflation data. It now seems that there is less room for lowering interest rates later this year.”
Bafman writes that “Powell again drew attention to three key categories of core inflation, noting the sharp decline in core product inflation and the likelihood of an imminent slowdown in housing inflation. But core services inflation, which stood at 4.7% in January, has accelerated in recent months, and this remains the major concern most of the Fed, when Powell points out that the slowdown in this sector will require “damage to the conditions of the labor market”. Further interest rate hikes are also expected in Europe, on the order of another 1.5%. The additional interest rate hikes in Europe and the US are expected to support further interest rate hikes by the Bank Israel. This tendency to continue raising the interest rate in Israel is expected to be supported by the fact that inflation in Israel continues to be higher than the upper limit of the price stability target.
10:17
The trading day on the European stock exchanges opened with slight decreases in the stock indices. Trading in futures contracts on US stock market indices is now stable.
In the Asian stock exchanges, trading was closed with the Nikkei index rising by about 0.5% in Tokyo, on the other hand the Hang Seng index in Hong Kong fell by 2.4%, and in Seoul the Kospi recorded a decrease of about 1.3%.
08:00
Asian stock markets are trading today in a mixed trend. In Tokyo, the Nikkei index rises by about 0.4%, on the other hand, the Hang Seng index in Hong Kong drops by 2.4%, and in Seoul, the Kospi registers a decrease of about 1.3%. Shanghai is down about 0.4%.
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Trading in futures contracts on US stock market indices is now stable.
Fed Chairman Jerome Powell’s testimony before the Joint Economic Committee of the Houses of Representatives in Washington began yesterday. Among other things, Powell said that “the latest economic data came in stronger than expected, which indicates that the ultimate interest rate is expected to be higher than expected in the past. If the totality of the data indicated that a faster tightening was required, we would be ready to increase the rate of interest rate increases.”
Today (at 17:00 Israel time) Powell’s testimony before the members of the committee will continue and there will also be a question and answer phase that, as always, may continue to shake the market. Growth data in the Eurozone will also be published today (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), with 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.
US government bonds are now down, and yields are continuing to climb. This is after yesterday the yield on the 10-year bond rose to 3.97%, and the yield on the two-year bond rose by about 8 basis points to a level of 5.01% – a record since 2007 following Powell’s remarks.
Now the yield on the 10-year bond is around 4%, and the yield on the two-year bond climbs another 6 basis points to a level of 5.07%.
In the commodity market, slight increases of up to 0.3% are recorded in crude oil contracts. American WTI oil traded around $77.7 per barrel and Brent oil around $83.5 per barrel. Gold drops slightly to about $1,815 per ounce.
In the world forex market, the dollar index jumped by 1.2% yesterday, in parallel with the increase in bond yields and the declines on Wall Street. Now the dollar is strengthening by another 0.1%-0.2% against the euro and the pound and about 0.5% against the Japanese yen.
A mixed trend is recorded in the crypto market today. Bitcoin is stable trading around $22,000 after a sharp drop yesterday and Ethereum is trading around $1,555.