Global Bond Yields Surge and US Job Growth Slows in Weekly Review
Pasternak Shoham analysts review global bond market turbulence, weak US employment data, mounting French debt pressures, and major corporate earnings reports.
Analysts at Pasternak Shoham investment house have released their weekly economic review, highlighting major shifts in global bond markets, employment data, and corporate earnings across the tech and retail sectors.
Global Bond Markets and US Employment
Global bond markets continued to experience severe turbulence. On Thursday, the yield on 10-year US Treasury bonds climbed to 5.34%, the highest level since 2002, while 30-year bonds touched 5.68%. This trend was not confined to the United States: British 30-year gilts surpassed 6% for the first time since 1998, German bunds reached 3.6%—a peak not seen since 2008—and Japanese 10-year bonds traded at 3.13%, levels unseen since 1996.
"The long end of the yield curve is not pricing in the Fed; it is pricing in oil, deficits, and uncertainty, and weak employment data does not solve any of them."
Friday's employment report revealed that the US economy added only 29,000 jobs in September, falling short of expectations for 90,000. Additionally, July and August figures were revised downward by 60,000 jobs. The unemployment rate ticked up to 4.2%, and wage growth slowed to an annual pace of just 3%.
European Debt and Corporate Earnings
In Europe, economic pressures mounted as French 10-year government bond yields touched 4.96% on Thursday, reaching their highest level since 2002. The spread over German bunds widened beyond 1.4%, surpassing the spreads of historically weaker economies such as Greece and Italy. France's national debt stands at 119% of GDP and is projected to reach 121%, with interest payments expected to hit €91 billion next year—significantly exceeding the defense budget.
On the corporate front, NVIDIA announced an additional $150 billion share buyback program, bringing its total to $235 billion, while its stock touched an all-time high on Friday. Meanwhile, Tesla surprised markets with 486,532 vehicle deliveries for the quarter, outperforming expectations of around 461,000 and sending its stock up by 4.7%.
Tel Aviv Stock Exchange Performance
Back in Tel Aviv, a shortened trading week concluded with downward trends. Semiconductor shares stood out positively, led by Camtek and Nova, which rose by approximately 10% over the week in tandem with global trends. Notably, El Al shares surged by 15.5% following security incidents involving regional flights.
