Trade overview: current reports, trends, indices, stock prices, bonds, foreign exchange and commodities and analyst recommendations
1. The stock markets
A relatively quiet opening is expected in Tel Aviv, against a background of stability in trading on Wall Street contracts and a mixed trend in Asia. Yesterday, the trading week opened with a negative trend, despite two positive events in the background: the end of the sale in Gaza and S&P’s decision to leave Israel’s rating and rating forecast unchanged. TA 35 and 125 indices decreased by 0.4%, TA 90 decreased by 0.6%. Among the industry indexes, the banking index stood out negatively, losing 1.4%, and in contrast, increases of 1.1%-0.9% were recorded in the cleantech, construction and energy infrastructure indexes.
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● Technical reasons: the economists estimate a positive surprise in the inflation data in Israel
After last week it registered a jump of 35% in one day, Liveperson Plunged yesterday to nearly 18% (following a 9% drop on Thursday) and reduced its increase in the last week to 4%. Since the beginning of May, it has lost about 5%, and since the beginning of the year, the stock has lost more than half of its value.
In Asia the trend is mixed. The Nikkei index in Tokyo rises by about 0.7%, the Hang Seng in Hong Kong climbs by 0.2% and small increases are recorded in Sydney and Shenzhen. On the other hand, the Shanghai index was cut close to 1% and the flagship indices in Taiwan and South Korea are also weakening.
On Wall Street the contracts are stable at this time. This week the report season will continue for the first quarter summary, and among the reporting companies we can mention the retail giants Walmart and Home Depot, the Chinese companies Baidu and Alibaba and the technology companies Cisco and Applied Materials. Reports of Israeli companies that trade in the US will also be published this week, including the technology companies Monday, Wix and Riskified.
In Israel, Dania Sibus and Energix are expected to report today, and later this week Bezeq, Tower, Amot, Mitronics, Cellcom and the international banks, Discount and Mizrachi Tefahot (all three on Wednesday).
Early in the morning it was reported thatNeogames The Israeli company (not traded in Tel Aviv) received a purchase offer from the private company Aristocrat, in exchange for $1.2 billion. The price per share in the offer, $29.5, is a 130% premium over its closing price in New York on Friday.
2. The bond markets
In the local bond market yesterday, slight declines were recorded in the central corporate Tel Bond indices, while the government bonds lost ground. The Tel Gov Shekel 10+ index of long-term bonds weakened by 0.5%, and the 10-year bond yield rose to 3.60%.
In the US, government bond yields are relatively stable, after rising on Friday. The yield on the 10-year bond rose by about 7 basis points to 3.46% and the yield on the two-year bond rose by about 8 points to 3.99%. In the background to trading – the continuation of disputes and discussions in Congress regarding raising the US debt ceiling.
Alex Zebzinski, Meitav’s chief economist, writes in his weekly review that the debt ceiling crisis is expected to be resolved, but “we fear that this time a scenario similar to 2011 may repeat itself. The debt ceiling will be raised at the last minute, but the US credit rating may down. After all, the USA, with a deficit of about 8% of GDP, which is expected to be almost the highest this year among the developed countries, and with a debt-to-GDP ratio of more than 120%, does not really deserve a AAA/AA+ rating. The events surrounding the crisis The debt ceiling can be used as a trigger for the rating companies to lower the credit rating for the US.”
3. The commodity and currency markets
The shekel weakened this morning against the dollar and the euro, compared to the representative rate set at noon on Friday (and remained almost unchanged compared to Thursday’s rate). The dollar jumps by 0.7% to 3.66 shekels, the euro rises by about 0.1% and the exchange rate is 3.98 shekels. The pound also registered a slight increase, to the level of NIS 4.56.
In the commodities market, the negative momentum continued and decreases of more than 1% were recorded in the prices of crude oil contracts. The price of a barrel of American oil falls below the 70 dollar level and the price of Brent oil retreats to 73.3 dollars per barrel. The price of gold is stable around $2,015 per ounce.
In the crypto market, moderate increases of up to 1.5% are recorded in the exchange rates of the major currencies. Bitcoin is trading at a level of 27.2 thousand dollars and Ethereum is around 1,825 dollars.
Today at 18:30 the Central Bureau of Statistics will publish the inflation data for the month of April, when the expectations of most economists in the market are that it will drop to the level of 4.6%-4.7%, compared to 5% in March. This, despite a 0.4%-0.5% increase in the index on a monthly basis, but in April last year there was an unusual increase of 0.8% in the index, but it is out of the latest calculation.
Rafi Gozlan, Chief Economist at the IBI Investment House, estimates that the monthly increase of the index will be mainly affected by the depreciation of the shekel, seasonal factors, continued increase in utility inflation, and the reduction in the electricity tariff. Modi Shafferer, chief financial markets strategist at Bank Hapoalim, details that “the prices of fruits and vegetables will sharply increase the index, along with the food prices that rose after Passover and the housing components that are expected to climb.”
Today the unemployment figures in the economy will also be published, and tomorrow (Tuesday) an estimate for the growth of the Israeli economy in the first quarter of 2023 will be published.
From what is happening in the world – for the first time since the establishment of the presidential regime in Turkey in 2017, the presidential elections will be decided in a second round – after the incumbent President Recep Tayyip Erdogan finished with less than 50%. At the end of counting 97.95% of the votes, Erdogan received 49.34% of the votes, while opposition leader Kemal Kilicderoulu received 44.99%.
The economists of Bank Hapoalim refer in their weekly review to the rising food prices in Israel, which have begunSticking to the gaps created in the face of price increases in the world in the last two years.
“Food prices in Israel have risen in the past two years by 10.3%, a moderate rate compared to most countries in the world. Measures such as reducing tariffs, encouraging competition, and social pressure have curbed some of the price increases. In the US, for example, food prices rose by 18% during this period and in Europe even more from that. The current price increases are narrowing the differences against price increases abroad, and they also mean that inflation without energy is no longer much different from the rates in the US and Europe. The price indices for the coming months are still expected to be high under the influence of food and housing prices. We estimate that the slowdown in economic activity will slow down inflation in the second half of the year, although it is expected to remain around a level of about 3%.”
Hapoalim economists estimate that if there are no surprises in the consumer price index and growth figures in the first quarter, the Bank of Israel will be able to leave the interest rate unchanged at 4.5% and wait to see if the slowdown in the economy works as expected to curb inflation.