Ahead of the market opening: The two stocks expected to jump today on the stock exchange

The trading day opens on a positive background, following a strong week on Wall Street and ahead of a busy week of local reports, led by the banks.

Dual-listed stocks return this morning with a positive arbitrage gap of about 0.5%, which should support the opening. Notable gainers: Tower is expected to jump about 5% and Nice about 4%, following the strong tech rally on Wall Street over the weekend. On the other hand, Nova is expected to fall about 2% and Palo Alto about 1.5% — a mixed picture, but with a general positive trend that will support the indices.

The background for this is the surge in New York, where the Nasdaq jumped about 5% in a week after the weak employment report eased fears of an interest rate hike. This positive sentiment is spilling over to Tel Aviv this morning.

This week is the big reporting week for local banks. During the week, Hapoalim, Leumi, Discount, and Beinleumi will report — meaning all the major banks except Mizrahi-Tefahot. These are the reports that most influence the local stock exchange, as banks are the heaviest sector, and their shares are in almost every pension portfolio.

The focus will be on three things: the financial margin (how much the Bank of Israel's interest rate cuts will erode the profits that reached record highs), provisions for credit losses (an indicator of the state of households and businesses), and the continuation of dividends and generous buybacks. It is important to remember that the banking index already jumped about 9.6% in July, so expectations are high, and the bar for the reports is set accordingly.

Beyond the banks, Camtek, Next Vision, Elbit, Strauss, Cellcom, and Isracard will also report this week. Each of them can move its stock sharply, as we have seen throughout the season.

The main macro event this week in the US is the Consumer Price Index (CPI), which will be published on Wednesday. After the weak employment report that already eased interest rate fears, a moderate index will further strengthen the expectation that the Fed will leave the interest rate unchanged in September — which will continue to support the markets. A higher-than-expected index, on the other hand, could bring back the fears.

The opening today is expected to be positive thanks to the dual-listed stocks and the tailwind from Wall Street. But the real test of the week is in the bank reports, which directly affect the pension savings of almost every Israeli. If the banks prove that profitability holds up even as interest rates fall, this is good news for those who hold them. If they signal erosion, a realization is possible after the strong July rally.

This week, as we have seen throughout the reporting season, the difference between a stock that jumps and one that falls lies in the forecast and expectations — not just in the numbers of the past quarter. It is worth following the reports with a cool head, without getting carried away by a one-day reaction.