Five things to know ahead of the trading day opening
Trading in Tel Aviv will open against the backdrop of gains in Asia and a tailwind from Wall Street; dual-listed stocks will have a slight impact. The US Treasury's move calmed the bond market, but UBS recommends sticking to the short end. The rift in the Fed is deep, and Bank of America estimates: 3 more interest rate hikes this year. The reporting season in Tel Aviv is shifting gears: Altschuler Shaham, Dmri, and Shikun & Binui are in the spotlight. Also: Target's surge and Walmart's test.
Market review: current reports, trends, indices, stock prices, bonds, foreign exchange, commodities, and analyst recommendations.
1. Stock Market
Trading on the Tel Aviv Stock Exchange will open this morning against the backdrop of calm in the US bond market following the Treasury's steps in Washington, which helped a green close yesterday on Wall Street. The local reporting season is shifting gears with a long line of financial reports expected this morning, including Altschuler Shaham, Dmri, Nofar Energy, Phoenix, and Shikun & Binui.
Dual-listed stocks return to trading with almost zero impact on the TA-35 index. Pressure on technology and defense stocks leads to negative gaps in Tower (-1.7%), Elbit Systems (-1.0%), Camtek (-0.2%), and TAT Technologies (-1.9%). A partial tailwind comes from Nova (+1.4%), Palo Alto (+1.9%), and Formula Systems (+2.1%).
Asian markets are recording a positive trend. The KOSPI index in South Korea surged by about 6% thanks to gains in SK Hynix (+12%) and Samsung (+8.5%). Japan's Nikkei climbed by about 1%, supported by the technology sector led by SoftBank (+4.0%).
2. Bond Markets
The sharp wave of selling in the global government bond market stopped following the US Treasury's move to double its long-term debt buyback program. The 30-year US Treasury yield retreated below 5.20%. UBS recommends that investors focus exposure on short- and medium-term bonds, as the front end of the yield curve remains anchored and relatively stable.
3. Commodities and Currency Markets
The dollar is trading around baseline levels against the shekel (2.973). Oil prices have recorded gains for the fourth consecutive day amid geopolitical tensions: Brent crude climbed to $91.62 per barrel, while WTI rose to $85.83. Gold surged by over 3% to $4,486.88 per ounce. Bitcoin broke its recent trading range, reaching $68,476 amid expectations of a friendly regulatory climate in the US.
4. Macro
The minutes of the July Fed meeting reveal the deepest rift in the central bank since 2016. Meanwhile, Bank of America economists maintain a hawkish forecast, predicting three interest rate hikes of 0.25% by the end of 2026, arguing that AI investments are making the economy more resilient to restrictive monetary policy.
5. Forecast: Target and Walmart
Target shares have surged over 53% year-to-date, showing an impressive recovery under CEO Michael Fiddelka, with operating margins reaching 9.6%. Today, investors are focused on Walmart: JPMorgan analysts suggest that low market expectations may create an opportunity for the stock to outperform if the company reports better-than-feared results.
