Market Opening: Stocks Under Pressure and the Start of Earnings Season

The trading day opens with slight pressure expected from dual-listed stocks, but against a calmer general backdrop than the weekend — after the attack on Iran was cancelled and the immediate threat was removed.

Dual-listed stocks return this morning with a slight negative arbitrage gap of about 0.3%, which may weigh on the opening. Notable decliners will be chip stocks: Camtek is expected to fall by about 4.5% and Nova by over 2%. This is a continuation of the weakness that characterized the sector throughout July, but with relatively moderate intensity.

It is important to remember the context: local chip companies finished a difficult month (Nova fell 22% in July), so any further decline comes against a difficult backdrop. On the other hand, the relatively small negative gap suggests that the market may be starting to stabilize after the turmoil.

The main supporting factor today is the de-escalation on the Iran front. After a tense weekend where it seemed a major bombing operation was imminent, Donald Trump reversed course and the attack was cancelled. The removal of the immediate threat reduces uncertainty, which capital markets dislike above all else. The relief may support sensitive sectors such as real estate, banks, and insurance, and balance the pressure from the chip sector.

An additional bonus: the de-escalation removes, at least temporarily, the threat to the continuation of interest rate cuts by the Bank of Israel — good news for borrowers and the real estate market.

Wall Street concluded last week in the green, led by Amazon (a 15% jump on excellent cloud reports) and Microsoft. The message from the reports was positive: the giants continue to invest heavily in AI, which calmed fears of a slowdown in the sector. A warning sign that remains in the background: the 10-year bond yield is at a high of over a year (4.73%), which increases the cost of capital and puts pressure on growth stocks.

This week, the earnings season opens in Tel Aviv. Among the prominent names: Tower, Nova, Enlight, Gilat, Ormat, Bezeq, NICE, and El Al. The reports of local chip companies will be examined especially in light of the difficult month, and El Al will provide a picture of the aviation industry in the shadow of geopolitical fluctuations. Each report can move an individual stock sharply — as we saw with Teva and Opko last week.

Today's opening is expected to be a struggle between two forces: pressure from dual-listed stocks and chips on one side, and geopolitical relief on the other. We may see a relatively mixed picture, without a clear trend in one direction.

For the Israeli saver, this week will focus on local reports. A single report, good or bad, should not dictate decisions in a long-term portfolio. A day like today, with chips weighing but a calm general background, is exactly the kind of day where composure is preferable to a hasty reaction to every movement.